UPDATE 1-Argentina calls holdout funds "terrorists," says Germany "hostile"

miércoles 24 de septiembre de 2014 16:28 GYT

(Recasts, adds Fernandez comment)

By Hugh Bronstein

BUENOS AIRES, Sept 24 (Reuters) - Argentine President Cristina Fernandez accused hedge funds suing the country for full repayment of defaulted debt of practicing "economic and financial terrorism", heightening the rhetoric in the country's years-long legal battle with the investors.

Speaking before the United Nations General Assembly on Wednesday, Fernandez said "terrorists are not only those who set off bombs, but also those who destabilize economies, causing hunger, misery and poverty."

The comment came just hours after Fernandez's cabinet chief Jorge Capitanich accused Germany of having a "hostile attitude" toward Argentina's debt restructuring effort, citing an advertisement by the hedge funds which quotes a German official criticizing Argentine policy.

Both flights of rhetoric stem from a case that has become a rallying cry for Fernandez, who often characterizes the funds as "vultures" out to wreck Argentina's finances in their pursuit of astronomical profits.

"The vulture funds," Fernandez told the General Assembly, "are practicing a kind of economic and financial terrorism".

The day started with the full-page advertisement, paid for by the Virginia-based American Task Force Argentina, that appeared in local dailies Clarin and La Nacion. The ad quoted German Finance Minister Wolfgang Schauble calling Argentine policymaking "an example of lack of strength."

Capitanich shot back that "Germany has always had a hostile attitude toward Argentina, from an economic and financial point of view." He noted that Germany was among 11 countries including the United States that on Sept. 9 voted against Argentina's proposal that the United Nations adopt a multilateral legal framework for sovereign restructurings.   Continuación...