The Debtors Agreement: Financial negotiations in Latin America

Abstract

This article reviews an aspect of the history of attempts in Latin American attempts in the 1980 to arrive at a collective agreement on debt service and reduction. It puts into perspective both its failure and its long-term implications. Examining the group of debtors also offers stark contrasts with coalitions in the commercial field. While none of them achieved the change of rules that many proposed as a goal, the results reside in the side payments that members obtained by introducing a threat to the negotiating table. In the long run these side payments to creditors strengthened the creditors architecture of debt restructuring with effects that they may radiate to Europe today