Greece’s “Argentina” Moment
Watching the news coming out of Greece over the weekend reminded me of the economic crisis in Argentina in 2001. Growing public unrest, a history of military intervention and an seemingly irresolvable economic crisis are all common factors but Argentina stands as a defining example of why it doesn’t always pay to follow the advice of the IMF.
Looking at the growth of the Argentinian economy today its hard to argue that they chose the wrong path. This should worry the heck out of Euro policy makers. Its seems very far fetched to imagine a world where Greece exits from the Euro but growing public pressure and a lack of political consensus behind the austerity measures being proposed make this option more likely every day. I think Moody’s recent evaluation that there’s now a 50:50 probability of a Creek debt default is probably right on the money.
