2006 Reports

The Argentinian Debt: History, Default, and Restructuring

Damill, Mario; Frenkel, Roberto; Rapetti, Martin

We believe that the study of the Argentinean foreign debt needs no justification. For almost three decades, Argentina's foreign debt was continuously one of the main concerns of economic policy. Yet, both the record amount of the defaulted debt and the novel characteristics of its restructuring may be sufficient reasons to include an analysis of Argentina in a selection of studies about sovereign debt. Therefore, the processes that led to the default of the debt and its subsequent restructuring constitute one of the main focuses of this work. However, the Argentinean case also presents other aspects that demand attention, our analysis takes these into account as well. The Argentinean experience is often used as an example of general arguments that take the country as a notable particular case. The rhetoric power of the example precisely comes from its supposedly well-known characteristics, yet sometimes these characteristics appear exempt of solid proofs. Many are second hand references and in some cases not even that but the mere mentioning of a "consensual image". Thus we are motivated to take a close look at what happened in Argentina. This work is in part a polemic against some of those references that we consider fallacious. Each reference involves certain facts that we examine and try to explain. Our criticism also reaches the general plausibility of the argument that falsely takes the Argentinean case as an example. We think that the plausibility of an argument is strongly questioned when the argument is proved false in the case serving as its notable example.