Thursday, January 27

The ghost of the ‘corralito’ resurfaces in Argentina 20 years later


December invokes in Argentina the most uncomfortable ghosts. They prowl driven by the economic crisis, fear and hopelessness. 20 years after ‘playpen’, the financial crisis that exploded the country like a cluster bomb, with five presidents in just 15 days, the memories of that month of 2001 emerge as a reflex action. Thefake newspotential reissue of past traumas have been on such a scale that the Central Bank (BCRA) assured that there is no chance that dollar savings will be confiscated again. The rumor had been fueled by a recent decision by the BCRA, which had prohibited financing trips abroad with credit cards in comfortable installments and Argentine pesos. The measure was adopted to protect international reserves. For her part, Gabriela Cerruti, the spokesperson for the President’s Government Alberto Fernandez, ruled out a devaluation of the national peso.

But the restlessness does not stop, among other reasons because there is a common problem that links December 2001 with this month of December, and that is the lack of dollars in state coffers. Argentina has a long and troubled relationship with the US currency. The dollar is more than a savings and investment instrument, inevitable for real estate transactions. Sociologists Mariana Luzzi and Ariel Wilkis, authors of ‘The dollar. History of an Argentine coin (1939-2019) ‘They have described it as a “public artifact for interpreting the economic and political reality that no citizen of the country can ignore.” Argentine companies and families have savings abroad or under the mattresses of their homes 304,097 million dollars.

The days of the ‘corralito’

The problem comes from afar and has always had as a counterpart strong devaluations. Nothing compares with the shudders of two decades ago. Those episodes, which caused 33 dead and looting waves, are read through the worries of the present. The December 2, 2001, and after 10 years of validity of a law that established the parity between the local currency and that of the United States, feeding the dreams of a First World Argentina on the basis of the sale of state-owned companies and a furious external indebtedness, the Government of the then president Fernando de la Rua he encountered an irreparable drought. Bankers, financiers and people related to political power arrived in time to withdraw their deposits and send them abroad. Savers no, and that is why, from that day on, they were only able to withdraw $ 250 from their accounts. 70,000 million of the North American currency were frozen.

For De la Rúa it was the beginning of the end. Thundered the casseroles. The Government decreed the Site status. The protests intensified. On December 20, the president resigned. The provisional first president, Adolfo Rodríguez Saa, suspended the payment of the foreign debt that represented 166% of GDP. Weeks later, the provisional president, Eduardo Duhalde, the Argentine currency depreciated 400%. The Argentine collapse had lasting effects on the lives of its inhabitants.

The Fund, again

The hecatomb of the ‘corralito’ and today have, in addition to the dollars, another protagonist in common: the International Monetary Fund (IMF). De la Rúa’s fate was decided from the moment the financial institution refrained from continuing to finance Argentina. These days, the Fernández government is in a fight with the IMF with an uncertain ending. In 2006, Nestor Kirchner decided to cancel all the debt that the country dragged with the Monetary Fund at once: 9,800 million dollars. But in 2018, a president of the opposite political sign, Mauricio Macri, He asked the IMF for money again: $ 47 billion. Much of this unprecedented outlay in the history of the entity fed the mechanism of the capital flight in the last two years of the right-wing Administration.

Fernández assumed on December 10, 2019 under the weight of that debt, as well as that contracted with private creditors. In 2020 it managed to refinance this last liability. The agreement with the IMF has not yet arrived. Argentina should pay in 2022 and 2023 more than 38,000 million dollars. Fernández said that he will not agree to an agreement based on greater hardships for a society with 41% poor. A delegation from his government has traveled to Washington to negotiate with the organization. Meanwhile, Buenos Aires is cooking by the heat and the prophecies of new disasters.


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