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Argentina: Congress Votes to End Debt Standoff with U.S.

by Associated Press / / Source: Associated Press
Senators debate the approval of a settlement with creditors over the country's defaulted debt at the Senate in Buenos Aires
Senators debate the approval of a settlement with creditors over the country's defaulted debt at the Senate in Buenos Aires, Argentina, March 30, 2016. MARCOS BRINDICCI / Reuters

Argentina's Senate voted early Thursday to overwhelmingly approve a deal with creditors in the U.S.

The deal could put an end to a years-long dispute that made the South American nation a hard place to do business, and kept it from accessing desperately needed financing.

Congress approved the deal in late February, and the House of Deputies passed it earlier this month. The Senate began debating Wednesday morning and around 1 a.m. Thursday passed the measure 54-16.

RELATED: Argentina Faces Default as Debt Talks Fail

Passage puts an end to a bitter chapter that made Argentina a financial pariah and was often a point of sharp political clashes. It's also a boost for President Mauricio Macri, who campaigned on promises to restart the continent's second largest economy, in large part by solving a dispute so thorny it led to changes in how debt contracts are restructured worldwide.

While Macri's PRO party doesn't control either chamber in Congress, most analysts had predicted the measure would pass because Argentina is strapped for cash and needs foreign investment to begin growing after four years of economic stagnation. Still, it was clear during the debate that nobody would be celebrating.

"I will vote for this because we are complying with a sentence," said Sen. Norma Durango from the opposition Peronist Party. "But I'm not happy or at ease" about it.

RELATED: Argentina: New President Macri Promises Major Changes And Honesty

Macri's predecessor as president, Cristina Fernandez, had refused to negotiate with the creditors, which she called "vultures" and said were trying to bully Argentina. The issue was a central part of last year's presidential campaign. Macri and opponent Daniel Scioli, Fernandez's chosen successor, clashed over whether a deal was necessary and who would be the tougher negotiator.

Thursday's passage also allows Argentina to take on $12.5 billion in debt, roughly the amount that financial analysts believe the country will need to resolve the various disputes with holdout groups.

"It's much more complicated for the country not to agree (to pay) than to agree," said Sen. Miguel Pichetto, leader of the chamber's Peronist bloc. "The debt could accelerate and go viral."

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