In brief

Disputed elections in Afghanistan

The results of Afghanistan’s second round of presidential elections had not been made public when D+C/E+Z went to press in early July. Controversy had erupted nontheless. Abdullah Abdullah accused the election commission of suppressing masses of votes in his favour. In terms of policy, he and his opponent Ashraf Ghani are close (see D+C/E+Z 2014/06, p. 258 f.), but their election campaigns have been fierce nonetheless. Shortly after the print edition of D+C was finalised, however, it was announced that Ghani was leading according to a prelimnary count of the votes and that complaints would be considered. (dem)

Argentina’s new debt crisis

Argentina’s government was facing an awful dilemma when D+C/E+Z went to press in early July. The reason was that a court in New York ruled that it was illegal for Argentina to service restructured debt without also repaying in full those creditors who had not agreed to a restructuring deal after the financial crisis at the turn of the Millennium.

In the past, President Cristina Fernández de Kirchner refused to pay what she calls “vulture funds”. These funds bought Argentinian bonds at discount prices during the financial crisis, hoping to be able to claim the full value eventually, whereas more than 90 % of bond holders agreed to forsaking 70 % of the nominal worth of their papers. If Argentina does not pay the “vulture funds”, the country will technically be in default by the end of July. The consequence would be an economic crisis and more restricted access to international financial markets. The alternative is unappealing too, however. The government must either pay the holdouts or reach an agreement with them at a time when their negotiating power has been enhanced by the US judiciary.

The London-based Financial Times comments that this case highlights “the urgent need for a better sovereign debt restructuring process”. One reason is that the Argentinian debt problems have implications for many other countries that depend on access to international financial markets. (dem)