Argentina has failed to strike a deal to avert its second default in more than 12 years after talks with hold-out investers ended without settlement.<br /><br />The so-called “hold-outs” are US hedge funds that bought debt on the cheap and have never agreed to restructuring.<br /><br />Last June a judge on the US Supreme Court ruled that Argentina was liable to pay the hold-outs the 967 million euros they were demanding and blocked payments to the restructured bond holders unless it also paid the “Vulture funds”.<br /><br />After the last minute talks appeared to be going nowhere, the court-appointed mediator Daniel Pollack confirmed that a default by Argentina was imminent . <br /><br />A fresh default is not expected to affect Argentina’s economy as it did more than a decade ago, when dozens were killed in street protests and the authorities froze savers’ accounts to halt a run on the banks.<br /><br />The consequences of this second default are likely to be a worsening of an economy already in recession and a weakening currency as more Argentines seek to hold dollars putting pressure on foreign reserves.
