|Children presented their Christmas art to Interim Greek Prime Minister Lucas Papademos at the Maximos Mansion, his official residence, Dec 24, 2011.
should be viewed with caution and are often used to support a fixed view
while inconvenient information is ignored. Wittingly or unwittingly, proponents of a Eurozone exit for
Greece underestimate the devastating consequences - - the risks are also
high for Ireland given that it is the developed country that is more dependent
on foreign-owned firms than any other.
Last July, Shane Ross, Irish
politician and journalist, cited Argentina, Russia and Iceland in making a
case for Ireland defaulting on its debts and leaving the euro. In respect of
Argentina, he wrote: "Default marked the beginning of a long recovery. A
series of defaults have helped to sustain a dramatic return to prosperity."
People who lived through it know better than Ross that the reality less sanguine while Argentina did have the good fortune that its default coincided with the start of a global commodity boom.
Argentina is an impressive producer of soft and hard
commodities; it did not have to launch a new currency; the price of soybean,
its biggest export, was $160 per ton in January 2002. It peaked at $554 in
July 2008 and is trading about $440 per ton in early 2012. At the time of
its default, Argentina had an annual fiscal deficit of 3.2% of GDP (gross
domestic product). Greece’s deficit was 13.6% in 2009. When Greece got its
first bailout in 2010, it's national debt as a ratio of GDP was almost
treble Argentina's 54% level at the time of default.
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