Negotiations between Argentina and its holdout creditors are drawing to a close. Should the talks falter, the country will default - again.
To many observers it is clear who is to blame for Argentina's current predicament. As the government teeters on the brink of its second default, all eyes are on the hedge funds that bought up Argentine debt and refused to take a loss when it was restructured.
Those creditors have been labeled as bankruptcy profiteers, greedy capitalists, even "extortionist" by Buenos Aires.
Some US investors, on the other hand, have a different take on the matter. They would argue that if debt is taken on, it is wise to pay it back.
After Argentina's first default in 2001, the country was virtually cut off from international finance markets and had trouble securing new credit.
"If you consider what a hard struggle it's been for other nations economically, Argentina's situation is particularly sad," said Josh Rosner, an analyst with the Graham Fisher consulting firm in New York and an expert in the Argentine debt crisis.
Argentina's history of loss-making goes back a decade and if no deal is cut with the hedge funds, the next decade is unlikely to be any different.
With access to foreign investments, Latin America's No. 3 economy could well move up to the top spot on the continent given its resources and highly skilled labor force, Rosner added.
Argentina only has itself to blame for its current judicial dilemma. It struck a deal with 97 percent of its creditors, ensuring that they would recover 30 percent of their original investment by virtue of a generous debt cancellation program.
But a clause in that agreement stipulated that creditors could make new claims should Buenos Aires reach different settlements with other creditors. Enter Elliot Management Corp and the other hedge funds that make up the 3 percent of Argentina's creditors that rejected large writedowns.
Now that a US court has sided with the hedge funds, who are demanding full payment , Argentina could face new claims to the tune of tens of billions of dollars.
For that reason, the country may well opt for a default rather than paying back the holdouts. Legal experts, however, are divided over whether the clause in question is still valid since Argentina has been ordered to pay up by a judge.
Ideology of self-reliance
The way Rosner sees it, the quarrel over debt has done more damage to Argentina than the amassed debt itself. For too long the country has believed that it could rely on itself completely and avoid turning to international markets.
"The benefits of lower interest rates and access to global financial markets over the next 10 years would be about $70 billion (52.2 billion euros)," Rosner said, adding that the positive impact of a deal has been underestimated. "Our calculation is they've left about $50 billion on the table from the lack of foreign direct investment."
A majority of Argentines are in favor of the government making good on the debt it owes creditors, according to polls in which Rosner has participated in.
"Everyone who's educated understands that when a country issues bonds, it benefits, as do the buyers of that debt," Rosner said. "And contract law around the world dictates that if you engage in borrowing, you also accept the terms of the repayment."
If Argentina were to default again, its citizens would bear the brunt of the consequences. The country would face recession, economic isolation and political unrest.
Last time around, the country had five different presidents within a span of just two weeks.