Two outstanding economists, both Nobel Prizes winners, Paul Krugman and Joseph Stiglitz, believe that the Greeks should say No to the proposal of the Troika to continue with the policy of austerity. The example of the the Argentine default in 2001 is one of the reasons adduced.

Krugman thinks that "Greece should vote "no" and that their government should be ready, if necessary, to abandon the euro", among other reasons because all the chaos imaginable with an abandonment of the euro already exists and that the devaluation of the currency could be a first step to begin the recuperation of an economy that shrank 27 per cent since the beginning of the austerity measures, five years ago. In addition, this is the only way that Greece can recover its independence as a nation (El País, June 29, 2015).

Stiglitz focuses on the Argentine experience that he knows well. "After the default, Argentina began to grow at an annual rate of 8 per cent, the second highest in the world after China. The Argentine experience shows that there is life after a restructuriing of debt and after leaving an exchange system".  On the contrary, he believes that the euro was a success only for eight years, but has now failed (BBC Mundo, June 30, 2015).

While the basic analysis is fully comparable, given the need to escape from the austerity imposed by the IMF and the World Bank, what happened in Argentina does not admit comparison with the Greek case, so we need to separate the default (already done) from the exit from the euro (quite improbable).

There are three differences that separate Greece from Argentina 

The first is the quality of the governments. The Argentine default came under the neoliberal government of Fernando de la Rúa, after a decade of savage neoliberalism under the two governments of Carlos Menem (1989-1999), which led to the privatization of state enterprises, the destruction of industry and high levels of poverty and unemployment. The default was a double and simultaneous collapse: of the economic privatization policies and of the governments that sustained them. In Greece, the political decomposition that was produced at the end of 2001 in Argentina does not exist.

The second is the people as an important protagonist. Although the default was formally declared by the interim president Adolf Rodríguez Saa, who was only seven days in office, in reality it was street action that imposed the suspension of payments. In the midst of a widespread national insurrection in which the popular sectors came together with the middle classes (pickets and cooking pots), and with the fierce repression that took 39 lives in two days, the president had to hastily abandon the Casa Rosada (presidential palace) by helicopter.

During the insurrections there were thousands of road blocks, hundreds of spontaneous demonstrations, hundreds of escraches (exposure protests) and cacerolazos (protest by banging empty cooking pots), an infinity of district assembles (300 just in the Federal Capital) and the streets and central squares were oocupied by the population.The State and the police forces were completely overcome and neutralized by the massivity of the protests.

At this point, one should recall that Argentine workers have a long experience of outbursts that overwhelm repressive forces. Without going so far back as the memorable days of the beginnings of the Twentieth Century, and limiting ourselves to the last five decades of the century, we have the insurrection of October 17 1945, the two "Cordobazos" (1969 and 1971), the “Rosariazo” uprising (1969), a dozen small-town uprisings in Mendoza, Cipolletti, Corrientes,Tucumán and Casilda, to mention only the better known. To this tradition we must add the uprisings of the 1990s, the 76 protest actions, with attacks on public buildings or the houses of political leaders, following the popular uprising of Santiago del Estero in December 1993, up until the end of the Menem government (1).

In the third place, the global geopolitical reality is quite different from that of 2001. Those were the final years of the unipolar world centred on the United States, whose decline accelerated in the next few years with the failed invasions of Iraq and Afghanistan, a decline precipitated by the crisis of 2008, whose epicentre was in Wall Street. In 2001, the BRICS Alliance, uniting the principal emerging countries, was not yet formed. Russia and China did not present a challenge to the hegemony of Washington and the dollar did not face the competition that now it faces from currencies such as the yuan. Argentina had no alternatives to funding from the IMF and the World Bank.

The situation of Greece is completely different. Prime Mnister Alexis Tsipras has traveled several times to Russia where he has strengthened diplomatic and economic ties. In the recent Economic Forum of St. Petersburg, a memorandum was signed for the construction of the Turkish Stream gas pipeline that will unite Russia and Greece through Turkey. China also has large investments in Greece, in particuarly in the port of El Pireo and in rare metals.

Greece is a key geopolitical piece for Nato. An eventual alliance between Athens and Moscow would be a headache for the Pentagon and a fissure in the western blockade of Russia. In a word, Greece now has options that Argentina could not dream of in 2001. This means that Greece abandoning the euro would be much more serious for the West than the Argentine default, in a global scene charged with tensions and threats to peace.

03/07/2015.-

(Translated for ALAI by Jordan Bisop)

- Raúl Zibechi, a Uruguayan journalist, writes in Brecha and La Jornada.  He is a member of the council of ALAI.

Note:

(1) María Celia Cotarelo, “La protesta en la Argentina de los '90”, revista Herramienta N° 12, marzo de 2000.