Wednesday, April 29, 2015

What Greece Faces if It Defaults

by Uki Goñi

New York Times

April 29, 2015

When President Adolfo Rodríguez Saá told Congress on Dec. 23, 2001 that “the Argentine state will suspend the payment of its foreign debt,” legislators jumped to their feet with joy. Their cheering quickly morphed into a chant of “Ar-gen-ti-na! Ar-gen-ti-na!”

Today, it is Greece, led by a recently elected populist left-wing party, Syriza, that is contemplating a similarly drastic unilateral declaration of independence from foreign creditors and international financial institutions. Economists like Nouriel Roubini, a professor at New York University, have long argued that “Greece should default and abandon the euro,” using “Argentine-style measures” to prevent “a disorderly fallout.” Far from the sky falling in, they say, Argentina’s economy soon roared back to prosperity; Greece should follow suit.

But were the years that followed really so rosy for the people of Argentina?


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