It has been called 'the sovereign debt case of the century'. Argentina's economy is being held to ransom by a small handful of very wealthy speculators. If Argentina doesn't give in to their demands by 15 December, so a New York court has ruled, the country will be judged to have defaulted.
The conclusion to this crisis doesn't only matter to Argentina. It effects the whole international debt system, specifically whether a sovereign nation has any power to defend its people from the most aggressive behaviour of international capital. Greece, for example, will need to watch the outcome of this case carefully.
The case is the most dramatic stage yet in a battle which has been waged for years by vulture funds against the republic of Argentina, to try to 'reclaim' payment on debts they bought during Argentina's economic crisis ten years ago. The most prominent player is NML, a subsidiary of hedge fund Elliot Associates, owned by billionaire Mitt Romney supporter, Paul Singer.
NML was one of a handful of so-called 'investors' who speculated on Argentina's debt at that time, but refused to join the vast majority of Argentina's 'creditors' in negotiating a reduction in the 'face value' of the debt (even though they only paid a fraction of the face value). Since that time they have hounded Argentina for repayments, last month going so far as to seize a naval vessel, which remains impounded in a port in Ghana.
This week a New York court ruled that Argentina would not be able to pay any of those debts off if it did not repay the vulture funds at the same time, and any bank which allows Argentina to repay one without the other would also be in contempt of the ruling. The next major payment must be made by 15 December.
First, let's deal with the vulture funds. There is no ethical justification whatever for their payment. These funds never lent money to Argentina. They speculated on Argentina's crisis, buying debt in the hope Argentina would go bankrupt - regardless of the misery of Argentina's people at that time.
The debt they gambled on was bought cheaply, representing the extreme risk they were taking. They took that risk and they lost. If they're not paid, a handful of multimillionaires will lose some small change.
But the reason these funds have a legal case is that international debt is governed by a perverse set of laws, developed since the 1970s, which see a nation state as simply another ordinary actor in the 'market'. A state, with a duty to protect the human rights of millions of citizens, is dealt with in much the same way as any other company or investment fund - worse in that it doesn't even have the sort of bankruptcy protection afforded to local authorities and individuals.
In spite of all manner of international treaties and UN conventions, the human rights of citizens is not something to take into account when deciding whether a debt should be paid or not. A state's first duty is not to its people - but the market. This couldn't be better demonstrated than in the latest New York judgement, which implies that a law Argentina democratically passed to prevent the President negotiating with vulture funds, is effectively in contravention of their duty to the market.
Of course the market is unable to function without the state - it was the powerful states of the world, including the US and UK who created the laws governing this investor-friendly paradise. That's why 'free market' bandits like Elliott run to the US courts to try to extract their profits from Argentina.
If we want to try to change this, people must force their governments to speak up for their rights over the rights of the markets. That means speaking up for Argentina's government when they in turn stand up against the vulture funds.
Campaigners in Argentina are pushing the government to go much further. Argentina's large debts have been recycled again and again over 30 years but are based on a build up of debt lent to the brutal dictatorship of the 1970s. Indeed some of the current debt comes directly from this period, such as loans made by the British government in 1970s which allowed this appalling military junta to buy British weapons.
In July, 2000, Federal Judge Jorge Ballester ruled that Argentina's debt was the result of at least 477 fraudulent and arbitrary acts. A federal court decision to declare the debt null and void is pending as are several federal court investigations covering various aspects of current debt. Nobel laureate Adolfo Pérez Esquivel has declared that "The debt claimed through this highly symbolic action [by the vulture funds] is illegitimate debt." He joins a wide range of groups in demanding an audit of Argentina's debt to ascertain the extent of illegitimate debts which should not be paid.
Perhaps it should be no surprise that laws governing debt settlements fail to recognise the concept of illegitimate debt. Someone holding your debt cannot be wrong. This situation will not change by recognising the current legal status quo, but only through countries like Argentina taking sovereign action. To do that they will need support here.
If Argentina decides to carry out its promise not to repay vulture funds, it will come under huge international pressure and economic destabilisation. If we believe that the state's first duty to its citizens' welfare rather than international markets, we must support Argentina in spite of the propaganda. Campaigners from Jubilee South have called for our support, saying 'Don't cry for Argentina - fight back'.