Overdosed on Debt

Dec 1, 2001

Argentina, consumed by excessive borrowing and spending, has discredited itself with investors. Despite another bond swap, only a full rehabilitation of the sovereign's messy finances can save the country.

Each time exhausted investors and bankers, not to mention ordinary Argentines, think the country's debt crisis is close to reaching some form of resolution, the government manages to knock together yet another bond exchange or squeeze more money out of the International Monetary Fund to stave off default. Yet, the more Argentina ducks and weaves, the more it discredits itself it and the more it exasperates the outside world.

In November, Argentina's feckless President Fernando de la Rúa was humiliated when he traveled to New York for meetings with investors and with President George W. Bush, having just lost the backing of the country's powerful provincial governors. They rejected De la Rúa's terms for a new financial arrangement - a crucial concession the IMF had demanded for supporting the country. In their half hour meeting, Bush politely urged De la Rúa to continue working with Fund and did not...

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