UN passes resolution on restructuring national debts

PanARMENIAN.Net - The UN General Assembly overwhelmingly approved a resolution sparked by Argentina's debt crisis Thursday, September 10, that sets out nine principles to restructure national debts, the Associate Press reports.

The world body has now approved three resolutions spurred by the speculative action that led Argentina to a second default. The United States, Britain, Germany, Canada, Japan and Israel voted against the measure.

The resolution asks all countries, international organizations and others to support the principles, which were drawn up by a wide-ranging committee established by the assembly that included government and outside representatives.

The first principle says governments have the right to restructure debt "which should not be frustrated or impeded by any abusive measures." It states that "restructuring should be done as the last resort and preserving at the outset creditors' rights."

The second says "good faith" would entail debtors and creditors engaging in constructive negotiations aimed at promptly re-establishing "debt sustainability and debt servicing." Others call for transparency to enhance accountability, impartiality and refraining from arbitrarily discriminating among creditors.

One principle, related to the Argentine dispute, says that "a non-representative minority of creditors ... must respect the decisions adopted by the majority of the creditors."

The United States reiterated its previous objections, saying the issues surrounding debt restructuring are already being dealt with in other international institutions including the International Monetary Fund and the International Capital Markets Association.