MONTEVIDEO, June 18 Uruguay is worried about a
debt crisis in neighboring Argentina, Economy Minister Mario
Bergara said on Wednesday, the first country to voice concern
about the spat some fear could trigger a new default.
"It affects us, but not that much as to destabilize our
economic process, thankfully," Bergara said. "The risk has been
mitigated, but that doesn't mean we're not eyeing the situation
with attention and worry."
On Monday, the U.S. Supreme Court declined to hear an appeal
by Argentina in its battle against the hedge funds which refused
to take part in its debt restructuring.
Argentina then said it was taking steps to pay restructured
debt under local law, which would essentially bypass the rulings
and raise default risks.
However, Argentina earlier on Wednesday said the exchange
offer was not currently under way and the country was open to
negotiations to solve the problem.
The specter of another financial crisis in Argentina has so
far not sparked fears of contagion, largely because Latin
America's third-largest economy has been disengaged from global
markets since its 2001-02 default.
Uruguay's economic exposure to Argentina is smaller than a
decade ago when the small agricultural country of 3 million
suffered its biggest ever financial crisis after its much larger
neighbor defaulted on $100 billion in debt.
Uruguay used to be a financial haven for Argentina, but only
16 percent of bank deposits currently belong to Argentines.
Uruguayan tourism, however, does remain heavily dependent on
wealthy Argentines, who are fond of holidaying in the glamorous
Punta Del Este resort.
(Reporting by Malena Castaldi; Writing by Alexandra Ulmer;
editing by Andrew Hay)