Greece could be like Argentina
Rage in the streets, workers thrown from their jobs, creditors demanding their money - that's Greece; but nearly a decade ago that scenario played out in South America. In a story that may provide a lesson for Europe, Argentina, spiralled into a chaotic default and remains a pariah in world financial markets. With uncertainty still hanging over a European bailout package, it remains possible that Greece could default on its debts entirely, making it an outcast like Argentina.
But the tales of other countries in crisis have shown that it's possible to push through tough measures and emerge with growth on the other side. It is a scenario that is beginning to resemble what happened in Argentina, whose $100-billion default in December 2001 was the biggest in history.
In the Argentine case, five presidents stepped down in two weeks, deadly riots shook Buenos Aires and Argentines lost their life savings. Much later, Argentina issued a take-it-or-leave-it offer to bondholders, offering to pay about 35 cents on the dollar. Today, the government still owes about $15 billion to hard-core creditors and has lost judgements in US courts to pay up. With the country still blocked from tapping international capital markets, it is mostly because of booming demand for its agricultural products that Argentina has been lifted from economic calamity.
Ted Rudow III
Palo Alto, California