(MENAFN- AFP) Argentina lashed out Friday at the US judge blocking it from servicing its debt, saying he was "ignorant" of democratic institutions after he branded its move to pay bondholders against his orders illegal.
The Argentine government has asked Congress for authority to repay creditors in Buenos Aires instead of New York to circumvent a court order by US District Judge Thomas Griesa that has forced the country into its second default in 13 years.
The judge's order bars the country from servicing its restructured debt until it settles a $1.3-billion dispute with two US hedge funds that refuse to accept a write-down on their Argentine bonds.
The economy ministry accused Griesa of hijacking Argentina's sovereignty at the behest of the hedge funds, which Buenos Aires calls "vultures" for buying up its debt at steep discounts after its 2001 default, then insisting on full payment.
"At the request of the vulture funds, (Griesa) now presumes to impose conditions on (Argentina's) Congress, the nation's highest legislative authority," the ministry said in a statement.
"The fact he has declared a bill that the executive sent to Congress 'illegal' again demonstrates his contempt for Argentina's national sovereignty and his absolute ignorance of the functioning of democratic institutions."
Argentine cabinet chief Jorge Capitanich for his part said Griesa's stance was "unfortunate, incorrect... and I would even say imperial."
At a hearing Thursday in New York, Griesa demanded Argentina scrap the repayment plan, calling it "illegal."
But he stopped short of granting the hedge funds' request to declare the country in contempt of court.
Argentina persuaded most of its creditors to accept a 70-percent loss on the value of their bonds after its 2001 default on $100 billion in debt, the largest in history at the time.
But the hedge funds suing it, NML Capital and Aurelius Capital Management, refused to sign up for the restructuring deals.
Under Griesa's orders, the Bank of New York Mellon has frozen a $539-million interest payment Argentina tried to transfer to restructured bondholders in June.
The Argentine government is scrambling to find a way around the judge's ruling in time to make its next payment deadline on September 30.
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