Sovereign Debt Crisis: A comparison between the cases of Argentina and Greece

FERNÁNDEZ ALONSO, JOSÉ

Padua

Seminario; Visiting Professors´ Seminars; 2015

Dipartimento di Scienze Politiche, Giuridiche e Studi Internazionali, Università degli Studi di Padova

The problem of sovereign debt crisis is as remote as the sovereign debt itself. The first default recorded in History occurred in Ancient Greece during the fourth century (BC), when ten cities-states declared a default on loans granted by the Temple of Delos. Defined as "situations in which a nation cannot -or do not want to- face service its external financial commitments" (Gallagher, 2011), sovereign debt crisis constituted a constant in the Westphalian International System as consequence of the relentless growth of capital flows beyond national borders. During this period ?specially during XXth Century-, this critical episodes affected several Developing Countries. Structural reforms implemented in these actors in order to overcome the political and economic decline of the eighties, did not prevent the outbreak of new sovereign debt crises. In fact, the set of reforms ?promoted by the infamous "Washington Consensus" - increased structural vulnerability of these economies, consequently raising new sovereign debt crisis in a new context of liberalization and deregulation. The experiences of Mexico (1994), Brazil (1998), Southeast Asia (1998), Brazil, Russia (1998), Turkey (2000) and Argentina (2001) gave a full account of it. The default by the latter signed up as the last link in that myriad of sovereign debt crisis in the developing world.Although, the tensions and/or friction accumulated in the international economy during the last years provoked that developed countries began to among those affected by sovereign debt crises. In this respect, a number countries of the eurozone peripheries began to experienced sovereign debt crisis. Of course, Greece was the most relevant case considering its dimentions and repercussions. This lecture aims to compare the origins and developments of the sovereign debt crisis reported by Argentina and Greece. Particularlly, the presentation aims to scrutinize the strategies adopted by national governments and bondholders, the "vultures" ones, among them.