By Arturo C. Porzecanski* The Argentine government’s current attempt to force investors to accept a punishing debt-restructuring plan puts the country at risk of yet another sovereign default on foreign-law, foreign-currency debt. The attempt validates the massive loss of confidence that took place last August, when local and foreign investors ran for the exits in […]
Professor Porzecanski makes credible arguments in the post. He demonstrates using a historical timeline the build up a lack of confidence in the Argentine economy. Once again, the intelligent economic and political policy that the country deserves takes back seat to cult politics. Investor confidence evaporated more with each victory of the A. Fernandez-C Fernandez de Kirchner ticket. Once they officially set in the country’s highest office, investor confidence hit bottom and remained there. The country’s spiral into the now too familiar position of being on the brink of default terminated before the coronavirus crisis existed.
The winds of political change blew hard in the direction of the Peronists leading up to the election. The general electorate votes for the candidate who promises to restore credibility and respect in the Argentine way of doing things. Rational economic policy sits in the back seat of the car of rationality. The average Argentine believes his country’s eternal economic meltdown is the result of the imposition of unfair lending practices and policies.
I am puzzled as to why the IMF would lend (again) the country money.