At one level Argentina is a sovereign nation, so the law in Argentina is anything the government decides.Most countries have a distinction between how "sovereign entities" (which is not the same as countries) are treated, the short version being that often an SE can choose not to take part in legal proceedings and nothing can be done about that.An example is the Kuwait Investment Office and other sovereign wealth funds that as an SE, is treated for tax purposes like a government and thus doesn't have to pay, even on its activities outside Kuwait.The problem of course is that this leads to the problem of lending to someone who doesn't have to pay back, which means they pay a higher rate of interest for the risk.Although a government may pass a law or even have a clause in its constitution saying it won't default with impunity, the fact that it can later change its mind, pushes up rates.Various things have been tried, like revenue bonds, escrow, sinking funds but they are far from satisfactory from any point of view.Argentina is a byword for bad government, not just a particular regime, but the way that the attitude of its politicians is often "the last government did this, so why should we pay ?"Sadly this correlates with the breathtaking level of corruption to be found in countries like Argentina where inevitably the previous government was motivated by personal gain, including explicit bribes.Also, they just don't get the idea of the rule of law. In developed countries we have learned (after serious pain) that law needs to bind the government as least as much as citizens and companies, whether democratically elected or as is so often the case with semi-failed countries like Argentina, whatever bunch of generals are running it this week. In military regimes or socialism, you don't have "laws", you have orders that have been issued.Of course lessons may be learned as in the case of the USA which constutionally and culturally observed some of the more stupid things done in Europe and prospered mightily as a result.But ironically, one lesson; the separation of church and state which the nascent USA took very much to heart is now the biggest cause of the forthcoming US default.Europe suffered terribly from various bouts of type A christians killing type B, B kill A, C splitting off from B and killing B and C and every so often killing the Jews.The US didn't directly experience that and so "faith" is not a negative word when people explain their decision makingand this expresses itself in "belief" politics, ie faith in itrs most generic form. Thus American politicians "believe" climate change, evolution, geology, mathematics and economics are wholly abstract theories that a strong belief ocan overcome. That sounds anti-Republican, but actually there is no meaningful difference in a world where Hilary Clinton describes her favourite book as "The Bible", and where Democrats espouse a faith in government action that would make a socialist Frenchman laugh and that Democrats "believe" in climate change for reasons that most of them simply cannot articulate any more than they can descibe the solid state physics of the ARM processor in their iPad.This is the same philosophy as we see in Argentina, whose politicans genuinely expect their beliefs to be the hallmark of reality.
Last edited by DominicConnor
on September 1st, 2014, 10:00 pm, edited 1 time in total.