New information from National Archives raises further questions on the odious nature of British loans.
Economic justice group Jubilee Debt Campaign  has uncovered documents which show that Argentina still owes debts to the UK government based on arms sales to the Argentine junta in the years leading up to the Falklands War.
The archives, which include a letter from then Foreign Secretary David Owen, show the British government keenly aware of the odious nature of the Argentina regime  – describing it as ‘worse’ than Pinochet’s Chile – and that conflict over the Falkland Islands was possible. However, Owen states that “complete consistency in our approach”  towards Argentina was not possible.
Argentina’s £45 million restructured debt includes loans for two Type 42 Destroyers and two Lynx helicopter which were used in the invasion of the Falklands.
The debt overhang left by Argentina’s military junta was not cancelled, despite a court case in 2000 finding that loans to Argentina under the dictatorship were part of “a damaging economic policy that forced on its knees through various methods … and which tended to benefit and support private companies – national and foreign – to the detriment of society” . These loans ultimately helped fuel Argentina’s economic crisis in the early 2000s.
The loans were run up by a government department called the Export Credits Guarantee Department – which has recently changed its name to UK Export Finance. The Liberal Democrats have a policy to audit all the debt owed to UK Export Finance and cancel those found to have come from “reckless loans to dictators known not to be committed to spending the funds on development” .
Nick Dearden, Director of Jubilee Debt Campaign said:
“Lending the military junta money to buy British weapons was illegitimate and odious. The newly uncovered documents show that then Foreign Secretary David Owen knew the UK government was lending money for arms to an abhorrent regime. The Liberal Democrats must stick to their pledge to rule invalid loans recklessly given to dictators.
“This is not the only occasion in which debt has been run up supplying arms to a regime which British soldiers would soon be fighting. The anniversary of the Falklands War should force the government to question the way it does business. Business Minister Vince Cable must implement Liberal Democrat policy and stop subsidising war through the backing of loans to other governments to buy weapons.”
For more information, including a detailed briefing and copies of the documents from the National Archives, contact Tim Jones on 07817 628 196
A briefing on Argentina’s debt to the UK and the arms sales is availablehere.
 Jubilee Debt Campaign UK is part of a global movement demanding freedom from the slavery of unjust debts and a new financial system that puts people first.
 In 1976 Argentina experienced a military coup. The subsequent ‘dirty war’ from 1976 to 1983 was a period of state terrorism. Between 9,000 and 30,000 people were killed or ‘disappeared’. Political parties and trade unions were banned, whilst religious groups had to apply for approval with the state.
 The British government applied sanction to Pinochet’s regime in Chile, but not to Argentina, even though David Owen admits in the papers that: “Important questions of principle do anyway arise given the scope of size of potential arms sales to a regime whose human rights record is worse than Chile, and which could come close to a confrontation with us over the Falklands.” However, the Secretary of State 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 to this problem and that to attempt to do so would impose unreasonable constraints upon us.”
 Judge Jorge Ballestero, the Argentine Federal Court, July 2000.
 Liberal Democrats. (2010). Accountability to the poor: Policies on International Development. Policy Paper 97.