Monday, April 9, 2012

UK Seeks Repayment Of Falklands Era Loan From Argentina

April 8, 2012 8:00 pm

UK seeks repayment of Falklands era loan

Britain is chasing £45m of debt owed by the Argentinian government that was lent to the country’s military junta in 1979 and used, in part, to buy weapons that were later used to invade the Falkland Islands.
UK Export Finance, an arm of Vince Cable’s business department, inherited the debt after Argentina defaulted on loans to British exporters, which were underwritten by the UK government at the time.





The goods supplied by those exporters included two Lynx helicopters and two Type 42 warships, which were used in the Falklands invasion. One of the helicopters was among the first to arrive on the British territory after the initial Argentinian landing 30 years ago last week.
Debt campaigners are calling on Mr Cable to stick to his Liberal Democrat party’s official policy of cancelling debt “that was recklessly given to dictators known not to be committed to spend the loans on development”.
But a spokesman for the business department told the Financial Times: “The government has no plans to offer debt forgiveness.
“If Argentina requires further debt relief to that already agreed, it should approach the Paris Club [the intergovernmental body that agrees debt relief], which is responsible for addressing these matters on behalf of all official creditors on a multilateral basis.”
Nick Dearden, director of the Jubilee Debt Campaign, said: “Lending the military junta money to buy British weapons was illegitimate and odious. The Liberal Democrats must stick to their pledge to rule invalid loans recklessly given to dictators.”
He added: “The anniversary of the Falklands war should force the government to question the way it does business. The government must implement Liberal Democrat policy and stop subsidising war through the backing of loans to other governments to buy weapons.”
Documents uncovered by the campaign group reveal that UK ministers had doubts about the original decision to underwrite the loans.
Lord Owen signed off on the decision when he was Labour foreign secretary in 1979. At the time, he said “important questions of principle” were raised given the “size of potential arms sales to a regime whose human rights record is worse than Chile [which was under an arms embargo from the UK at the time]” and could “come close to a confrontation with us over the Falklands”.
But he went on to say in a letter to the Ministry of Defence: “I think we must recognise that it is not
possible to achieve complete consistency in our approach.”
He added that there was “no Foreign Office objection to the sale of the Lynx helicopters” even though he acknowledged “these items would be relevant in any threat to the Falkland Islands”.
Mr Dearden said: “The newly uncovered documents show that the then foreign secretary David Owen knew the UK government was lending money for arms to an abhorrent regime.”
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