The Wall Street Journal reports on the strange career of Argentina’s bad debts. Because the government of Argentina defaulted on sovereign debt many years ago, the nation’s art is now un-loanable:

Argentina’s National Museum of Fine Arts is withholding some key art pieces from an exhibition in Frankfurt out of concern that German bondholders would seize them. The standoff is the latest development in Argentina’s marathon legal battle with holders of $30 billion in defaulted bonds.

The organizers of the 2010 Frankfurt Book Fair have invited the South American country to showcase its artistic heritage. But the custodians of Argentina’s national art collection are unable to comply with the German curator’s request because of the country’s ban on overseas art loans aimed at preventing litigant creditors from seizing government-owned assets.

“No art that’s deemed part of the national patrimony is allowed to be lent overseas because it runs the risk of being seized by bondholders,” said Maria Antonia Bychowiec of the museum’s strategic administration division.

Argentina Withholds German Art Loan (Wall Street Journal)