US court orders Argentina to pay its debts in billion-dollar showdown

BUENOS AIRES (AP) - Argentina has finally run out of wiggle room in a billion-dollar showdown over foreign debts unpaid since the country's world-record default a decade ago, and the stakes couldn't be higher for President Cristina Fernandez.

A US federal judge in New York late on Wednesday ordered Argentina to pay immediately and in full everything it owes to what Ms Fernandez calls "vulture funds" that she blames for much of her country's troubles. That adds up to US $1.3 billion (S$1.6 billion), due by Dec 15.

The judge also barred Argentina from paying other bondholders until it satisfies this judgment, putting the president's back against the wall: If she doesn't reverse her longstanding position and pay up, she risks triggering another historic Argentine debt default, this time totalling more than US$20 billion.

"It is hardly an injustice to have legal rulings which, at long last, mean that Argentina must pay the debts which it owes. After ten years of litigation this is a just result," District Judge Thomas Griesa concluded.