When Argentina is brought up in relation to Greece, the focus tends to be on the Argentine default and the end of convertibility. But at the time, observers made frequent references to Argentina’s “Hooverite” policies, as its leaders unleashed round after round of belt-tightening.
Here’s a useful timeline of events from the Guardian. (20 Δεκ. 2001)
It’s worth pointing out that prior to the total breakdown, the Argentine government pursued a strategy of austerity in the midst of a severe recession in order to access IMF funds. We’re seeing the same story play out in Greece, only with the Troika playing the role of the IMF.
Six months before the street forced the Argentine government out of office, they opted for their own version of the fiscal pact. Explained Barry Eichengreen:
Domingo Cavallo, Lopez-Murphy’s successor as economy minister and architect of the Argentine currency board, proposed a zero-deficit law mandating that public spending (inclusive of interest payments) be cut to the level of revenues. The Congress quickly concurred. Compliance required sharp cuts in non-interest spending (some state salaries and pensions were cut by 13 per cent), and the predictable political backlash immediately raised questions about the sustainability of these measures.
