As Argentines closely watch the financial turmoil in Greece recalling their own worst crisis 14 years ago, the architect of the South American country’s recovery has a message for the European nation: Renegotiate your debt.
Greece
is in a financial limbo now that its bailout program has expired, cutting it
off from vital financing and pushing it one step closer to leaving the euro.
The country has put limits on cash withdrawals in order to keep banks from
collapsing.
Its
situation was further worsened Tuesday when it failed to repay a $1.8 billion
debt to the International Monetary Fund, the first developed country to do so.
Former
Argentine Economy Minister Roberto Lavagna is credited with playing a key role
in his country’s recovery after its $100 billion debt default in 2001. He said
Tuesday that a “strong restructuring” of its debt is the way to help Greece
come out of its crisis and avoid conflict within the European Union.
“It’s
not the definitive condition … but it is necessary” to avoid a political
conflict, Lavagna told The Associated Press. “Democracy is worth more than
markets.”
Lavagna
who was economy minister in 2002-05, led Argentina’s recovery from the 2002
recession, considered by many the worst in the country’s history, and
spearheaded its 2005 debt restructuring.
Argentina’s
financial collapse was so bad that one of every five Argentines was out of
work. The peso, which had been tied to the dollar, lost nearly 70 percent of
its value, and banks froze deposits and barricaded behind sheet metal as
thousands of protesters unsuccessfully tried to withdraw their savings.
Lavagna
said the demonstrations in Greece “are way more peaceful” than in Argentina,
where at least 27 people died in protests and looting in December 2001 as the
economy unraveled. He said that at the time, Argentina also lacked international
support and didn’t have the obligations of an economic union like the European
Union.