Will Greece be another Argentina?
Remember Argentina and when it Defaulted? What are the similarities, and what choices does Greece have? Below from Athens News;
ARGENTINA defaulted on almost $100 billion euros of external debt in December 2001, the largest such sovereign default at the time. The reasons that led to this were multiple and went back 30-40 years.
The Argentinian peso had been pegged to the US dollar for 11 years and in the efforts to defend the peg, the country’s foreign reserves were depleted. As the crisis unfolded, there was a massive exit of capital from the country by both foreign investors and domestic depositors. Eventually, the government put a limit on withdrawals. It led to riots, but people still lost their money.
After ceasing all payments on foreign debt, Argentina was shut out by the capital markets. There was an agreed debt exchange with a 76 percent haircut in 2005. However, a large number of creditors refused to participate, arguing that Argentina was asset-rich and they were entitled to their money.
Full article here.