Argentina's President Warns That Greek Bailout Will Fail

Bail-out will fail, Argentina warns
By Jude Webber
Published: May 12 2010 03:00 | Last updated: May 12 2010 03:00
The Greek rescue package will fail, according to Cristina Fernández, Argentina's president, whose country suffered the world's biggest debt default in 2001, reports Jude Webber in Buenos Aires .

She said the bail-out repeated "the same recipes they applied to us, which provoked [what happened in] 2001". Argentina, as an IMF member, voted for the Greek bail-out but "critically", Ms Fernández said, adding the enforced austerity will have "terrible consequences" on the economy. "They are repeating prescriptions whereby what they are trying to do is rescue the financial system."

In the 1990s, Argentina was a devotee of the pro-market Washington Consensus and pegged the peso to the dollar. But it racked up debt and its economy crashed. Argentina savagely devalued its currency and became a pariah on international financial markets.

Speaking at an event to refinance debt for Argentina's provinces, Ms Fernández defended the demand-driven economic model, which has delivered several years of high growth, championed by her husband, Néstor Kirchner, in his 2003-07 government and which she has continued ever since.

"Since 2003 we have been applying a totally different model that has permitted a very strong and very sustained reduction in the nation's debt," she said.

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