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N° 218 |
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| December 2002 |
| Argentina One Year On:
From a Monetary Crisis to a Financial Crisis |
| Jérôme Sgard |
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| In the months which followed the exit from
the currency board, the Argentine economy was confronted with a major monetary
crisis, menacing the survival of its national currency. The strategy to “pesify”
the economy, which was decided in February 2002, has succeeded technically. In
particular, the slowing of inflation reveals a considerable adjustment of relative
prices, which should support the development of the export sector. Today’s
problems lie more in finance: the way the economy was "pesified" has
worsened confusion concerning the solvency of nearly all agents. As a result,
it is now very difficult for savers, banks and companies to measure the value
of their net assets. Any durable revival of investment and growth will be impossible
as long as there is no overall political compromise over how losses will be shared
out, over the liquidation of insolvent companies and the return to State solvency. |
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