"Thieves! '' some shouted, pounding hammers.
It was a low moment for Argentina as abandoned an experiment to peg the peso with the dollar, froze the bank accounts and defaulted on $ 100 billion in debt, mostly outside.
Today, the sheet metal is missing. But the debilitating effects of Argentina's 2001 default and devaluation of the currency still linger. And now, as Greece balance toward a possible default, the Argentine could be instructive lessons.
On the one hand, a decade later, Argentina has not yet been able to re-enter the global credit market.
"A pattern is not free," said Jaime Abut, a business consultant in Rosario, a city north of Buenos Aires. "You have to pay the consequences, and for a long time. Argentina is no longer considered a serious country. "
If anything, economists say, the prospects of Greece could be worse. Argentina was and is a major exporter of agricultural products, and runs a trade surplus. Most of the Greek economy is services, especially tourism, and Greece perennially runs a trade deficit.
In addition, at the time of its standard Argentina had a fiscal deficit of 3.2 percent of gross domestic product. Greece's deficit was 10.5 percent of GDP last year, according to the European Commission — well above the EU limit of 3 percent.
And as a percentage of GDP, Greece's debt of 150 percent is far worse than the Argentina had — 54 percent — when he adopted the standard.
But perhaps the biggest bind for Greece is that it shares a common currency with the other European Nations that use the euro. And so, unless he took the imponderable and unprecedented fall in eurozone, Greece does not have access to a great tool — devalue its currency sovereign — that have helped Argentina its economic storm.
"The big problem for Greece is that they have a strong currency, much stronger relative to their productivity," said Eric Ritondale, a senior economist of Econviews, an economic consulting firm here.
During the Decade of 1990, trying to tame hyperinflation, Argentina had connected the value of your weight to the u.s. dollar — a strategy of "convertibility" that proved untenable because of rising global interest rates. The country's privatized many industries, leading to high unemployment, but also made Argentina's economy more efficient. (Greece, whose public sector accounted for about 40% of its economy before the debt crisis began last year, is now under heavy pressure to privatise.)
Until 1999, however, it was clear to most economists that Argentina was marching inexorably toward a default and devaluation. The number of people below the poverty line was growing — got in more than 50 percent of the population in 2002 — and unemployment was rising. The coalition Government of President Fernando de la Rúa began to unravel.
As with Greece now, social tensions grew. There were eight general strikes in Argentina, in 2001, marked by thousands of locks and looting. Huge lines formed outside many European embassies as waves of Argentines have fled their country.
"People have sold everything moved to Spain and took jobs doing nothing, because they felt the country had no hope," recalled Daniel Kerner, an analyst with Eurasia Group, a firm of political risk consultancy.
TheMr. de la Rúa resigned in December 21, 2001, fleeing from Government House by helicopter as a riot lasted below. Over the next 10 days, four Presidents assumed power and then quickly resigned before a fifth, Eduardo Duhalde declared the devaluation of the currency. Shortly thereafter, Congress formally approved the debt default that was already a reality.
In 2003, Nestor Kirchner was elected to replace the interim President, Mr. Duhalde. Mr. Kircher embarked on a new economic model — one that his wife, current President of Argentina, Cristina Fernández de Kirchner, continues to follow today. Its pillars are sustaining a weak currency to encourage exports and discourage imports and maintaining fiscal and trade surpluses that can be leveraged for government funding and pay the debts.
Assist this strategy has been the global increase in prices of agricultural commodities. For Argentina, a major producer of soybeans, the raw wave has been a godsend. Soybean prices rose from $ 200 per tonne in 2003 to about $ 500 per ton today.
Greece, with some agricultural exports, cannot expect a similar harvest. But economists say that can benefit from the example of Argentina to restructure debt — principally by seeking to prevent its repetition.
Charles Newbery reported in Buenos Aires and Alexei Barrionuevo of São Paulo, Brazil and New York.
