Kern, A. (2015) “Viva la competencia“, The European Magazine, 27 Μαρτίου.
Argentina was once the economic pride of the southern hemisphere. There is barely anything left after a half-century of misrule. Europe can (and must) learn from this cautionary tale.
The distance between Santiago de Chile and Bueneos Aires is only one hour flying time: an hour that separates the future from the past. One travels from an emerging boom town, bejeweled with new theaters and hip shops, to a city where decline is ever-present, and just a century ago the picture was completely different.
For a long time, Argentina was a place of longing. A land of promise where milk, honey and red wine flowed plentifully. The state founded along the Rio de la Plata was the most affluent in the region, Buenos Aires the most sophisticated capital in the southern hemisphere. The Argentines looked upon their Chilean neighbors with disdain, taking them for backwoods peasants. The picture has switched: The former backwoods peasants now fly to Buenos Aires for discount shopping.
Since Argentina and Chile are disposed to similar geography, population make-up, and climate, the reversal in their relations is due mainly to political and historical causes. An important part is the quality of the government leadership.
[…]Argentinization also threatens Europe
The negative example of Argentina should be a warning for the people of Europe, who also have the opportunity to vote for their own downfall. One who denies reform, expands bureaucracy, makes expensive campaign promises, all while lacking a moderate expenditure policy, is well on the way to argentinization. Even wealthy countries with a broad middle class and the best infrastructure, like the Argentina of the 40s and 50s, can start down this slippery slope. In Europe, unfortunately, many of the causes for the fall of Argentina are already present. Many of them stem from a reluctance to face global competition. Instead, there are those who lament the loss of the familiar Biedermeier and forget that the European welfare state is based primarily on the performance and hard work of previous generations.
Populists from the right and the left, like Hungary’s Viktor Orbán, France’s Marine Le Pen, Spain’s Pablo Iglesias, and Greece’s Alexis Tsipras and Yanis Varoufakis, with their tirades against globalization and the free market, their protectionist ideas, their theatrical performances, and their rhetoric somehow remind us of Argentina’s original sin: Perón. In Germany, populists from Gysi to Gauland may be less glitzy and glamorous, but their ideas remain dangerous all the same.
The established parties must make an effort to hold Europe on course. Never should we forget that everything one promises must be paid for somehow. Also, more government is often not the solution, but the problem. Consider the crumbling of a country like Argentina.
*Translated from German by Ben Hill
Σχετικές αναρτήσεις:
- Edwards, S. (2015) “Sovereign default and debt restructuring: Was Argentina’s ‘haircut’ excessive?“, VoxEU Organisation, 04 Μαρτίου.
- Καμενής, Δ. Στράτος, “Vulture Funds and the Sovereign Debt Market: Lessons from Argentina and Greece, Παρατηρητήριο για την Κρίση, Ερευνητικό Κείμενο Νο. 13, 11 Σεπτεμβρίου 2014.
- Mercille, J., (2013), “European Media Distort the Lessons of Argentina’s Crisis and Recovery”, Social Europe Journal, 07 Οκτωβρίου.