ARGENTINA on Friday accused a U.S. judge of being biased in favor of hedge funds that have sued the South American country for full repayment of defaulted bonds, cementing the tough stance it has taken ahead of debt talks set for New York this week.

    A series of rulings by U.S. District Court Judge Thomas Griesa leave Argentina just three weeks to clinch a deal with the funds before falling into another default, which would heap financial stress on its already shrinking economy.

    The government of President Christina Fernandez denounces the funds as vultures bent on crippling Argentina, Latin America’s third largest economy, for the sake of profit.

    “A lot of officials in the United States say its judicial branch is independent,” Argentine cabinet chief Jorge Capitanich said. “But it is not independent of the vulture funds because its decisions show clear partiality.”

    The legal fight stems from Argentina’s 2002 default on about US$100 billion in bonds. The financial crisis thrust millions of middle-class Argentines into poverty. The economy snapped back from 2003 to 2008 before being weighed down by high inflation and heavy-handed trade and currency controls.

    More than 92 percent of the country’s investors agreed to receive less than 30 cents on the dollar in bond restructurings carried out in 2005 and 2010.

    A group of funds rebuffed those terms after buying bonds at deep discounts and sued in U.S. federal court demanding 100 cents on the dollar. They won a judgment from Griesa in 2012 for US$1.3 billion, and Argentina’s appeals have failed.

    The government is sending a team to New York today to set conditions for talks by way of a court-appointed mediator aimed at settling the case. If the negotiations fail, Argentina would enter default, extending its 12-year absence from international capital markets.

    (SD-Agencies)