Argentine bondage - FT.com Buenos Aires" dispute with a group of hedge funds holding out for full payment on defaulted Argentine bonds highlights what is proving to be one of the most wasteful debt restructurings in history. It also demonstrates the need for a sovereign debt restructuring mechanism (SDRM). Instead, the world has got an unedifying suit judged already by two New York courts and possibly by the US Supreme Court too. Neither side can claim the moral high ground. Central to the holdouts" case is that in two debt restructurings, Argentina strong-armed creditors into taking a uniquely savage haircut worth just 25 cents to the dollar. Yet if warrants linked to economic growth are included, the payout in some cases has been double that. Of more systemic concern, points of law in the hedge funds" favour have led to a situation whereby if they conclusively win their suit it will be easier for other holdouts to block future sovereign restructurings. That is an unwelcome possibility, however "uniquely recalcitrant" Argentina has been. Cristina Fernández, the president, has certainly taken a stubborn "won't pay" attitude. This has hurt Argentina's international reputation but is central to her image as someone who fights heartless financiers and "wins." It is also a fiction. Argentina's restructurings have failed to reopen international markets. They were also more generous to creditors than Ms Fernández will admit. As a result, 12 years after its original $100bn default, Argentina is a financial pariah struggling to raise the funds it needs to develop its vast shale gas reserves, and therefore poorer than it need be. This profits nobody. Even if the US Supreme Court hears the case, it is unlikely to do so before October 2014. Meanwhile, the holdouts are wracking up legal fees and want to settle. Argentina's feet are also being held to the fire by a possible technical default. This would further squeeze trade finance, the economy and thus Ms Fernández's shrinking voter base. There is no easy way out. But Argentina might find life easier had it not racked up so many enemies - from an IMF outraged by its ropey national statistics to the Spanish government, which is still smarting over the Repsol nationalisation, and creditors unimpressed by its flouting of Paris Club debts. Mending fences would not make the hedge funds go away but it would make it be harder for them to present Argentina as a rogue debtor. Ms Fernández has spent too long behaving like a sulky adolescent. It is time to grow up.