Argentina will not start negotiating to avoid a catastrophic default until a US judge rules on a request to suspend his enforcement of an order to pay $1.5bn in debts by June 30, Argentina's economy minister has said.

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

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. 

Kicillof said Argentina would make no decisions until US 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. 

G-77 support for Argentina

If Argentina does not pay the plaintiffs, Griesa's ruling bars the country from using the US financial system to pay other bondholders. Argentina's next installment to the majority of its creditors is $907m, 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 $15bn in debt payments. And eventually, he said, creditors who did join the swap could also sue to demand at least $120bn 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 US District Judge Thomas Griesa.

A UN trade agency also criticised the ruling, which the US Supreme Court allowed to stand last week.

In a statement on its website on Thursday, the UN 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 US hedge funds that sued in Manhattan federal court were led by New York billionaire Paul Singer's NML Capital Ltd.

Source: AP