GA / RESTRUCTURING DEBT WRAP

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The General Assembly adopted a resolution in favour of a legal framework that would help regulate restructuring of foreign sovereign debt. The project –proposed by Argentina- was presented by the Group of 77 + China. UNIFEED-UNTV
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STORY: GA / RESTRUCTURING DEBT WRAP
TRT: 02:47
SOURCE: UNIFEED - UNTV
RESTRICTIONS: NONE
LANGUAGE: SPANISH / ENGLISH / NATS
DATELINE: 09 SEPTEMBER 2014, NEW YORK CITY / RECENT

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Shotlist

FILE - RECENT, NEW YORK CITY
1. Wide shot, exterior, United Nations Headquarters

09 SEPTEMBER 2014, NEW YORK CITY

2. Wide shot, Trusteeship Council
3. Voting results
4. Wide shot, Trusteeship Council applauding the vote
5. General Assembly President John Ashe reads the results of the vote
6. Med shot, delegates at the Trusteeship Council
7. SOUNDBITE (English), Terri L. Robl, Deputy Representative of the United States to the Economic and Social Council (ECOSOC):
“The United States cannot support the creation of a sovereign debt restructuring mechanism as it is envisioned in this resolution. The establishment of a statuatory mechanism for debt restructuring would create uncertainty in financial markets. If lenders face higher uncertainty regarding repayments, they may be less likely to provide financing and would likely charge higher risks premiums, potentially stifling financing to developing countries.”
8. Wide shot, delegates at the Trusteeship Council
9. Hector Marcos Timerman, Minister of Foreign Affairs of Argentina:
“The resolution that we have adopted is also a faithful reflection of the relevance and urgency that the clear majority of the nations in the world assigned to a reality that leaves us unprotected in the face of years of abuse of speculators given the normative gap in the current international financial system. We have decided that the time has come to give a legal framework to the financial system for restructuring sovereign debt that respects the majority of creditors and which allows countries to come out of crises in a sustainable manner.”
10. Med shot, delegates at the Trusteeship Council
11. Hector Marcos Timerman, Minister of Foreign Affairs of Argentina:
“The lack of a legal regulatory framework to restructure sovereign debt has a direct correlation which is poverty, disease and illiteracy and insecurity suffered by countries historically crashed by external debt.”
12. Wide shot, Argentinean Ambassador to the UN, Argentina's Foreign Minister and Bolivian Ambassador at the Press Briefing room
13. Med shot, journalists at the Press Briefing room
14. Hector Marcos Timerman, Minister of Foreign Affairs of Argentina:
“No creditor to Argentina can say that its credits have not been profitable. But usury should not be allowed. Usury is something that impedes the normal development of any economy, and what the Vulture Funds aim for is, not only to get back the funds invested in public bonds, but to have a 1,600 percent profit.”
15. Speakers walk out of the Press Briefing room.

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Storyline

The UN General Assembly adopted a resolution for the establishment of a multilateral legal framework for sovereign debt restructuring processes, on the spur of Argentina's debt crisis.

The resolution, drafted by Bolivia on behalf of the Group of 77 developing nations and China, was adopted the resolution with 124 in favor and 11 against and 41 abstentions.

The United States voted against the measure, saying it would create “uncertainty” in financial markets.
US representative Terri L. Robl, said that “if lenders face higher uncertainty, regarding repayments, they may be less likely to provide financing and would likely charge higher risks premiums, potentially stifling financing to developing countries.”

Argentina's Foreign Minister, Hector Marcos Timerman, said that “the peoples of the world” have spoken and we have decided that the time has come to “embark on an ethical, political and legal path together” to put an end to this “unbridled speculation.”

He said that the adopted resolution is a “faithful reflection of the relevance and urgency” that the international community assigned to a financial system that “leaves us unprotected in the face of years of abuse of speculators.”

Timerman said that “the time has come to give a legal framework to the financial system for restructuring sovereign debt that respects the majority of creditors and which allows countries to come out of crises in a sustainable manner.”

He pointed out that “the lack of a legal regulatory framework to restructure sovereign debt has a direct correlation with poverty, disease, illiteracy and insecurity, suffered by countries historically crashed by external debt.”

Argentina defaulted in July after a New York court that governs some of its original bond contracts blocked a coupon payment.

Argentina's Foreign Minister said after the adoption of this legal framework, Argentina expect to restructure its sovereign debt within one year.

He said that after the adoption of this resolution, countries facing sovereign debt will be able to restructure it in an “equitable, just and legal” manner without the “interference” of the Vulture Funds in the process.

In a press conference following the vote, Timerman noted that sovereign debt of countries in default – including Argentina - has been a “very profitable business” for creditors.

He said that “no creditor to Argentina can say that its credits have not been profitable. But usury should not be allowed. Usury is something that impedes the normal development of any economy, and what the Vulture Funds aim for is, not only to get back the funds invested in public bonds, but to have a 1,600 percent profit.”

The General Assembly resolution “decides to elaborate and adopt through a process of intergovernmental negotiations, as a matter of priority during its sixty-ninth session, a multilateral legal framework for sovereign debt restructuring processes.”

The purpose of this resolution is to increase “the efficiency, stability and predictability of the international financial system and achieving sustained, inclusive and equitable economic growth and sustainable development, in accordance with national circumstances and priorities.”

The resolution decided to define the modalities for the intergovernmental negotiations on a multilateral legal framework before the end of 2014.

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