Bourse
Eclairages Macro – Edition December 2011
Greece vs. Argentina: looks can be deceiving
Since the beginning of the Greek crisis in late 2009, it has become increasingly common to compare Greece today with Argentina's situation ten years ago. Given Argentina's post-crisis economic recovery, some go as far as to predict, or even recommend, that Greeks opt for an identical shock therapy by exiting from the euro zone, reintroducing a severely devalued national currency and going into a unilateral default. Nevertheless, comparisons are often misleading. We see several major differences that make the Greek situation unique and that require extreme caution when considering the best remedy to be used to end the crisis.
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Content:
- Argentina in 2001, Greece in 2011: striking similarities - A comparison of Argentina in 2001 and Greece in 2011: comparisons can be misleading - If Greece's exit is not the solution, then which way out of the crisis? |
Extract - Argentina's rebound capacity, most likely out of reach for Greece
In Argentina, the abandoned Currency Board and resulting sharp devaluation of the peso sparked a robust export rebound (+16% as of 2003, followed by an average growth rate of 8-10% a year). Dynamic exports drove Argentina's economic recovery with an average GDP growth rate of nearly 8%.
Some predict that Greece, by analogy, will be just as fortunate with a rebound in exports fuelling a dynamic recovery. Yet we advise caution given the regional positioning and sector specialisation of Greek exports. |
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