NEW YORK (AFP) ― Argentina will not make a bond service payment due June 30 in New York as ordered by a U.S. judge, the economy ministry said Wednesday, moving the country closer to default.

U.S. District Judge Thomas Griesa earlier ordered Argentina to pay hedge funds that refused to join a restructuring of the country’s debt and want to be paid the full $1.3 billion face value of the bonds they hold.

The Argentinian economy ministry said it “regretted” Griesa’s decision to uphold his 2012 ruling in favor of the holdout bond investors, embroiled in a case that has been in litigation for 12 years.

Griesa’s order “prevents Argentina from making the June 30 payment to its creditors of the restructured debt unless they simultaneously pay the entire amount claimed by the vulture funds,” the ministry added, estimating the total at $15 billion.

If Argentina does not pay on time to both the holders of the restructured debt and the hedge funds, a 30-day grace period gives it until the end of July before Buenos Aires will be seen as in default again.

A stay had been in place while the parties waited to see if the Supreme Court would accept Argentina’s appeal for it to review the case.

Griesa called President Cristina Kirchner’s apparent plan to avoid paying illegal.

Kirchner said late Monday that the country could not pay the hedge funds.

“Argentina has shown a more than clear will to pay, but there is a difference between negotiation and extortion,” Kirchner said after the U.S. Supreme Court declined to re-examine the federal judge’s position. Griesa blasted Kirchner’s “unfortunate” speech.

“Now that really does not give me confidence in a good faith commitment to pay all the obligations of the Republic,” he said.

Lawyers for Argentina told the court earlier that a team would travel to New York next week to hold talks with the hedge funds.

Robert Cohen, representing NML Capital, said they are “happy to talk.”

“In six weeks, much bigger problems have been solved. We’re prepared to sit with them.”

But Griesa made clear he was worried new negotiations were just another attempt by Argentina to stall, in a case that dates back more than a decade.

“You can talk about negotiations. But I believe there has to be a legal mechanism to prevent what I’m talking about, because we do not want another charade.”

Argentina has been fighting NML and other holdouts for years, after they refused to take part in a restructuring of the nearly $100 billion in debt Argentina defaulted on in 2001.

More than 92 percent of bondholders took part in the 2005 and 2010 restructurings, in which they took massive write-downs of their bonds’ value to help the government rebuild its finances.

But the hedge funds scooped up the debt on the market at huge discounts when the country fell into default, and have since pursued full payment in courts in New York, where the bonds were issued.

Griesa and Cohen said they wanted more information about Argentina’s apparent plan to evade payment on the hedge fund bonds by transferring the restructured or “exchange” bonds to Argentine jurisdiction, under Argentine law, via a new bond swap.

The aim would be to avoid the U.S. court’s order that the U.S. banks and settlement agencies which handle the country’s debt payments cannot pay the restructured bonds without also paying the holdouts in full.

Griesa clearly warned the banks not to take part in any tactic by Argentina to avoid paying the holdouts.

“There can be no payment to the exchanges (exchange bonds) unless there is a payment to NML,” he said.

“And if anyone undertakes to make a payment to the exchanges, without making sure of a payment to NML, they are in violation of this court order.”