This article gives little attention to very major point. It says: > But the courts say that interest may not be paid unless the country pays all it owes on bon

This article gives little attention to very major point. It says: > But the courts say that interest may not be paid unless the country pays all it owes on bonds it defaulted on years ago, something Argentina says it cannot and will not do. This is only true because of the terms of Argentina's debt agreement. Unlike the language of virtually every country in the world today except (I think) Jamaica, Argentina's agreements include what is called a "pari passu" clause and not a collective action clause. This fancy jargon just means this: under the pari passu clause, Argentina could not subordinate the debt to any future debt (that is, it cannot issue new debt that will be given a higher priority in making payments). All the courts have done is rule, sensibly I think, that Argentina has, in effect, subordinated the old debt by passing a law making it illegal to make payments on that debt while issuing new debt on which it will make payments. Meanwhile, under a collective action clause, a country could force hold-out debtors to accept a restructuring. If Argentina had written such a provision into its agreement, this would have been over a decade ago. (Though, in fairness, when the debt in question was issued, such clauses were not widely used). The article does talk about this, but only briefly. It highlights arguments from a few nations that old bonds do not all have collective action clauses, and that, possibly, a creditor could buy enough of a single bond issue to block restructuring even with a collective action clause. What the article does not point out, however, is that it is entirely within a nation's control how it drafts its pari passu and collective action clauses (and whether it includes either of them). All the courts are doing today is enforcing the agreements the way Argentina itself drafted them. If Argentina, or other nations feel threatened by our courts' robust enforcement of those agreements, they should probably consider changing the terms that they commit themselves to.