AP

UNITED NATIONS (AP) — Argentina is willing to negotiate to avoid a catastrophic default but is waiting for a U.S. judge to approve the country's request for more time to pay $1.5 billion in bad debts, Argentina's economy minister said Wednesday.

Five days before the deadline, Economy Minister Axel Kicillof remained defiant in a fiery speech before the U.N. ambassadors to the Group of 77 developing nations, saying complying with the ruling would send his country's economy into a tailspin.

He headed back to Argentina soon after the address without meeting with any of the bondholders who filed the lawsuit or the Manhattan judge that issued the verdict, which the U.S. Supreme Court allowed to stand last week.

The court-appointed mediator, Daniel A. Pollack, said he met with lawyers for the two sides on Tuesday but "no resolution has been reached" after several hours. He said the parties "agreed to keep the substance of our discussions confidential in order to facilitate the possibility of a future resolution."

Kicillof said he did not participate in the meeting with Pollack, saying the main purpose of his visit was to address the Group of 77 and highlight the potential global consequences of the ruling.

The minister said Argentina would make no decisions until U.S. District Judge Thomas Griesa rules on the request for a stay.

"Otherwise, it is not possible in such a brief time, obviously, to take into account all of the risk factors involved in any decision Argentina might make," Kicillof said at news conference following his speech. "We have only received silence so far from Judge Griesa."

The plaintiffs in the New York litigation represent about 1 percent of Argentina's $100 billion of debt that went into default in 2001. About 92 percent of creditors joined 2005 and 2010 debt swaps, agreeing to accept less money. Another 7 percent of those who did not join the swaps did not sue Argentina and are not part of the U.S. court case.

If Argentina does not pay the plaintiffs, Griesa's ruling bars from using the U.S. financial system to pay other bondholders. Argentina's next installment to the majority of its creditors is $907 million, due June 30, though the government has a 30-day grace period thereafter to avoid default.

Kicillof said complying with the ruling would swiftly lead to lawsuits from other bondholders who were not part of the debt swap, saddling Argentina with another $15 billion in debt payments. And eventually, he said creditors who did join the swap could also sue to demand at least $120 billion in payments on the same terms.

Argentinian Foreign Minister Hector Timerman said the G-77 threw its support behind Argentina, resolving to send a protest letter to U.S. District Judge Thomas Griesa over his order that Argentina make a payment to a group of hedge funds that, with interest, will have grown to $1.65 billion by the deadline.

A U.N. trade agency also criticized the ruling, which the U.S. Supreme Court allowed to stand last week. In a statement on its website Thursday, the U.N. Conference on Trade and Development, a body responsible with dealing with international trade and development issues, said the rulings "could have profound consequences for the international financial system" and "will make future debt restructuring even more difficult" across the world.

The plaintiffs have asked Griesa to deny Argentina's request for more negotiating time. Holdout bondholders from U.S. hedge funds that sued in Manhattan federal court were led by New York billionaire Paul Singer's NML Capital Ltd.

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