BUENOS AIRES, Argentina — Argentina is refusing to budge in its billion-dollar debt showdown in New York federal court, preparing an appeal Monday that it hopes will stave off another devastating default.

Judge Thomas Griesa left Argentina without any wiggle room, ordering the government of President Cristina Fernandez to pay US$1.3 billion ($118 billion) into an escrow account for the so-called “vulture funds” by December 15, even as it pursues its final appeals.

If Argentina pays the plaintiffs, then lawyers representing other holders of defaulted debt, totaling more than US$11 billion, are expected to demand immediate payment as well.

If it refuses, the judge said the Bank of New York Mellon must stop payment on the quotas Argentina has religiously honoured to a much bigger group of bondholders who agreed to provide the country with debt relief in 2005 and 2010. That group together holds more than US$20 billion in restructured debt, and some of them announced they too would appeal.

The ruling in favor of NML Capital, a fund run by billionaire Paul Singer, was issued just before the long Thanksgiving holiday weekend, and the consequences for Argentina were severe. The value of Argentina’s restructured bonds slipped in Monday trading, and the cost of insuring this debt against default jumped 51 per cent on Friday alone, according to data from Factset.

This insurance — in the form of credit default swaps — now reflects a 75 per cent probability that Argentina will stop paying within the year, Argentina’s El Cronista newspaper reported Monday.

Argentina’s Economy Ministry was closed Monday for another national holiday, Sovereignty Day. The government’s appeal had yet to appear on the court’s web site by Monday evening.

But Economy Minister Hernan Lorenzino told the pro-government Pagina12 newspaper that the appeal will restate the same arguments Argentina and others made already: that by enabling holdouts who refuse to go along with debt restructurings to tap into payments made to other innocent parties, the ruling endangers the US financial system as well as the ability of any government to rescue its people from economic crisis.

These arguments were already made by the US Federal Reserve, the Clearing House trade group of commercial banks and other interests holding US$20 billion in restructured Argentine debt, and Griesa dismissed them.

Now Argentina is counting on a long-shot appeal. But the judge’s ruling has already made borrowing more expensive in Argentina, not only for the government, but for any enterprise that needs financing.

And that has some analysts predicting dire consequences.

Economist Arturo Porzecanski at American University in Washington told The Associated Press on Monday that he believes this could be the beginning of the end of the Fernandez government, as Argentina’s deepening recession and financial turmoil lead to growing social unrest and to political crisis.

“The endgame is here and the Argentine authorities and bondholders who went into the exchange are just refusing to acknowledge this reality,” Porzecanski said. “If they don’t put that money in the escrow account, chances are the Argentine economy and financial system will start grinding to a halt.”

On the other hand, if it does pay, Porzecanski agrees that Argentina will immediately face other creditors, who are likely to win as well in New York courts.

“It’s true that most other creditors are likely to piggyback on this decision. It’s true that probably Judge Griesa would agree to it. It’s true that another 10 or so billion dollars would become payable,” he said. But “forestalling a default cliff is better than falling over one. It may be that their choice is between bad and worse, but realistically that’s their choice … That’s why I don’t think she’ll last very long. I think she’s doomed politically whether she makes the payment or not.”

Leading Argentine politicians — even those opposed to Fernandez — have nearly unanimously criticized the judge’s ruling in the last few days, for threatening the success of the debt relief that enabled Argentina to grow again. But many also question how the government has handled the legal case, and some called on Lorenzino on Monday to explain his actions to Congress.