Argentina denounces hedge funds' 'extortionate power' over debt

Argentina's economy minister went before a UN forum Wednesday to accuse so-called vulture funds of gaining "extortionate power" over countries like his own that seek to restructure their sovereign debt.

Argentina has been embroiled in a long, and so far unsuccessful, legal battle with two US hedge funds who have demanded full repayment of $1.33 billion in debt the South American country defaulted on in 2001.

A US federal judge has sided with the hedge funds, blocking an Argentine plan to restructure its debt with holders of the remaining 93 percent of its defaulted debt.

"The power the vulture funds have today is intolerable," said Argentine Economy Minister Axel Kicillof, arguing that they put at risk restructurings of sovereign debt everywhere.

Contending that $900 billion in debt was vulnerable, he charged that the hedge funds buy up the debt of countries in financial trouble "to litigate, not to solve the problem."

Their tactics have given them a "very elevated level of extortionate power," underscoring the need for "a general framework accepted by all countries for debt restructurings," he said.