What Greece and Argentina have in common

The scary part is that if you replace the name Argentina with Greece and people's names and currencies; you will find this to be a rather similar account of what is going on now in Greece and Europe, more than 10 years after the events in Argentina. The big difference is that Argentina had its own currency, which makes the case of Greece so much more complicated.

Argentina

Greece

Below is my summary of the Argentine economic crisis (1999-2002)  from Wikipedia:

"The Argentine economic crisis (1999-2002) was a dire financial downturn that affected Argentina's economy during the late 1990s and the early years of the 2000s. In macro-economical terms, the critical period started with the decrease of real Gross Domestic Product (GDP) in 1999 and ended in 2002 with a return to GDP growth. However, the origins of the collapse, as well as the effects upon the country's residents, can be traced back to earlier economic and political decisions that were reportedly of a questionable nature.

In a 2001 interview, journalist Peter Katel identified three very serious crises that converged at "the worst possible time" in his explanation for why the Argentinian economy unraveled in the manner that it did, at the time that it did:

• The Argentine peso was bound to the US dollar at the start of the 1990s by the Economy Minister at the time, Domingo Cavallo.
• The large amounts of borrowing by former Argentine president, Carlos Menem.
• An increase in debt due to the considerable shrinkage in the size of tax revenue that the government was receiving.

By late December, 2001, riots had reached the capital, Buenos Aires. Confrontations between the police and citizens became a common sight, and fires were also set on Buenos Aires avenues

The crisis intensified when, on 5 December 2001, the IMF refused to release a US$1.3 billion tranche of its loan, citing the failure of the Argentinean government to reach previously agreed-upon budget deficit targets and demanded further budget cuts, amounting 10% of the federal budget. On 4 December, Argentinean bond yields stood at 34% over U.S. treasury bonds, and, by 11 December, the spread jumped to 42%. By the end of November 2001, people fearing the worst began withdrawing large sums of money from their bank accounts, turning pesos into dollars and sending them abroad, causing a run on the banks. On 2 December 2001 the government enacted a set of measures, informally known as the corralito ,that effectively froze all bank accounts for twelve months, allowing for only minor sums of cash to be withdrawn, initially announced to be of just $250 a week.

During the last week of 2001, the interim government led by Rodríguez Saá, facing the impossibility of meeting debt payments, defaulted on the larger part of the public debt, totalling no less than US$132 billion, what approximately represented the seventh portion of all the money borrowed by the Third World.

Rodríguez Saá, utterly incapable of dealing with the crisis and unsupported by his own party, resigned before the end of the year. The Legislative Assembly convened again, appointing Peronist Eduardo Duhalde—then a Senator for the Buenos Aires province—to take his place. After much deliberation, Duhalde abandoned in January 2002 the fixed 1-to-1 peso–dollar parity that had been in place for ten years. In a matter of days, the peso lost a large part of its value in the unregulated market. In addition to the corralito, the Ministry of Economy dictated the pesificación, by which all bank accounts denominated in dollars would be converted to pesos at official rate. This measure angered most savings holders and appeals were made by many citizens to declare it unconstitutional. After a few months, the exchange rate was left to float more or less freely. The peso suffered a 80% depreciation, which in turn prompted inflation since Argentina depended heavily on imports, and had no means to replace them locally at the time."

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I ledaren 20 maj i DN så gör Peter Wolodarski följande sammanfattning att  "historien på väg att upprepas, med större efterdyningar" där han synar händelserna Argentina och hur dessa speglas i dagens händelser i Europa och Grekland och hur aktörerna runt agerar kontra-produktivt. Detta trots att facit redan finns att hämta från tidigare kriser, såsom som den i Argentina.

I ledaren 3 juni i DN så fortsätter Peter Woldodarski att diskutera vilka vägskäl och beslut som kommer att krävas inom EU för att Euro-samarbetet inte skall spricka. Wolodarski sammanfatta på ett bra sätt bakgrunden "Orsaken är att ekonomierna under lång tid, precis som Sverige på 1980-­talet, eldats på av billiga krediter och omfattande spekulation i bostäder. Medlemskapet i euron pressade ned räntan till en alldeles för låg nivå. När så krisen kom spräcktes prisbubblan och fastighetsmarknaden kraschade. Som en direkt konsekvens backade BNP, skatteintäkterna rasade och budgetunderskottet exploderade".

och....den 17 juni är det nyval i Grekland. Nu gäller det att ingenting händer under de fyra veckorna som är kvar fram tills dess.

I ett tidigare blogginlägg kan du läsa om hur du kan positionera ekonomiskt inför Greklands högst troliga utträde ur euro-samarbetet. Vi får hoppas att det inskränker sig till Grekland, för annars blir det, som Peter Wolodarski skriver "potentiellt katastrofala politiska och ekonomiska konsekvenser".

Det är lätt att glömma bort hur vackert det är i Grekland

när man bara läser om de ekonomiska problemen