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What Greece Faces if It Defaults
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Uki Goni writes from Buenos Aires, Argentina, describing the chaos and poverty of the years 2001-2003 following Argentina's default on its debt. At one point half of the population was below the poverty line. Argentina eventually recovered in 2004 under a new government of Nestor Kirchner, but had already incurred a terrible cost. This was especially hard on the lower middle class who had only their savings to live on and could not access their accounts at banks which were closed. Barter stores were common in those days as the barter currency gained wide usage for exchange of services. It is not clear whether this was due to badly implemented economic policy or defaulting on the debt. Goni says Greeks should seriously consider the cost of such a steep decline in the economy as they consider exit from the eurozone, and carefully evaluate the policies of Syriza politicians who risk a break with the EU.
Similarities between the experience of Argentina in 2001 and the experience of Greece, Ireland, Portugal and Spain in 2010-2012
12/09/2010
The financial crisis in the euro-zone and a similar situation that prevailed in Argentina in 2001. Experts from that period are convinced that euro-zone bondholders will have to accept securities offering less interest and maturing over a longer period.
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What Greece Faces if It Defaults
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If Greece Defaults, Imagine Argentina, but Much Worse
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The Argentina Veterans Eye the Euro Warily
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Government debt: Behold 2011, the year of sovereign shocks
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The cost to the elderly on pensions, low wage workers, and the middle class, of devaluing currencies in emerging markets
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Bhide points out the cost to the elderly, low wage workers, and the middle class, of earlier currency devaluations in Argentina, Mexico, Brazil, Russia, Thailand, Indonesia, South Korea and other Asian countries.
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Amar Bhidé: In Praise of the Beleaguered Euro
Wall Street Journal 05/07/2012
Soaring Prices Fuel Frustrations Among Weary Argentines
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Argentine Kingmaker Sets Battle Over Labor With Kirchner
Wall Street Journal 04/10/2014
Argentine Farmers Reap Discontent
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What Greece Faces if It Defaults
New York Times 04/29/2015
Brazil’s Economic Crisis Beats the Emerging Middle Class Back Down
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Nestor Kirchner, President of Argentina following the 2001 financial crisis
10/27/2010
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Nestor Kirchner, Ex-Leader of Argentina, Is Dead at 60
New York Times 10/27/2010
Behind the Scenes of Argentina's Power Couple
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Argentina after Kirchner: The end of an era
Economist 10/30/2010
Argentine Leader Defies Wall Street for Main Street
Wall Street Journal 08/01/2014
What Greece Faces if It Defaults
New York Times 04/29/2015
Richard Portes of the London Business School and other experts on the failures inherent in the EU's June 2011 Greece debt plan
06/22/2011
The EU's decision to adopt the French Banking Federation's plan that would double the cost of servicing Greece's debt will only make matters worse. This means increasing interest rates from 4-6% currently to 10% under 2% Greek economic growth, and makes debt servicing untenable. The adoption of similiar plans in the case of Mexico and Argentina in 2001, ended in failure a year after they were adopted, with private creditors taking losses. Financial markets see this with interest rates on Greek debt at 26%. Contagion might turn out to be worse as the situation deteriorates further.
Grouped Articles
EU Dismisses IMF's Criticism On Greek Bailout
Wall Street Journal 06/07/2013
What Greece Faces if It Defaults
New York Times 04/29/2015
If Greece Defaults, Imagine Argentina, but Much Worse
New York Times 06/25/2015
Move Buys Time for Greece, But Growing Debt Looms
Wall Street Journal 07/01/2011
Greece Approves Tough Measures on Economy
New York Times 06/29/2011
Wall Street Journal 06/30/2011
Hard realities- what a Greek exit from the eurozone in 2015 could do for Greece and for the European Union
04/29/2015
The Economist says Greece could end up becoming a failed state at the doorstep of the European Union. With the major parties losing support extreme parties on the right and left would increase support. The economy of Greece would suffer serious damage. As prices have declined by 16% with no surge in exports, a devaluation of the drachma would not be of much help. Argentina went through a period of severe hardship following the default on the currency. Greece, says the Economist, may be engaging in a strategy to extract concessions from the EU by waiting till the last minute. Yet this strategy has its drawbacks because of the damage to Greece's economy in the process, with the slight growth under the Samaras administration turning into a recession with the 6 months of the Syriza government in 2015.
Linked Articles
What Greece Faces if It Defaults
New York Times 04/29/2015
Economist 06/20/2015
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