UNITED NATIONS – The U.N. General Assembly overwhelmingly approved a resolution sparked by Argentina's debt crisis Thursday that sets out nine principles to restructure national debts.
The non-binding resolution, adopted Thursday by a vote of 136-6 with 41 abstentions, calls on debtors and creditors "to act in good faith and with a cooperative spirit" to reach an agreement.
The world body has now approved three resolutions spurred by the speculative action that led Argentina to a second default. The United States, Britain, Germany, Canada, Japan and Israel voted against the measure.
Argentina has been involved in a long legal battle with U.S. creditors over bonds left over from the country's record $100 billion default in 2001. It defaulted in July 2014 for the second time in 13 years after a U.S. judge ruled in favor of holdout creditors who were owed some $15 billion and insisted on payment in full while refusing to provide Argentina with debt relief.
The resolution asks all countries, international organizations and others to support the principles, which were drawn up by a wide-ranging committee established by the assembly that included government and outside representatives.
Argentine Foreign Minister Hector Timerman called it "a resolution in favor of economic stability, social peace and development."
The first principle says governments have the right to restructure debt "which should not be frustrated or impeded by any abusive measures." It states that "restructuring should be done as the last resort and preserving at the outset creditors' rights."
The second says "good faith" would entail debtors and creditors engaging in constructive negotiations aimed at promptly re-establishing "debt sustainability and debt servicing." Others call for transparency to enhance accountability, impartiality and refraining from arbitrarily discriminating among creditors.
One principle, related to the Argentine dispute, says that "a non-representative minority of creditors ... must respect the decisions adopted by the majority of the creditors."
Argentine President Cristina Fernandez told Argentinian television that the country had helped other nations "so they don't have to suffer the same tragedies, the same injustice, and the same miseries that we Argentinians went through."
The United States reiterated its previous objections, saying the issues surrounding debt restructuring are already being dealt with in other international institutions including the International Monetary Fund and the International Capital Markets Association.
The U.N.'s independent expert on the effects of foreign debt and human rights, Juan Pablo Bohoslavsky, called the resolution "a positive step towards clarifying which existing rules and principles of international law apply to sovereign debt issues."
"Sovereign debts should be geared towards implementing economic and social policies, with a view to achieving growth and development in the concerned countries," he said. "Unfortunately, as it is too often the case, sovereign debts can also throw millions of people into poverty, in particular when resulting in a debt crisis."