by brasilianista on TBP...
Also, from Miriam Leitão on the website of O Globo (the Brazilian national daily), on the eurozone crisis and its parallels with the Latin American crisis of the 1980s.
Ring of Fire
Europe should look to Latin America in the 1980s and 90s. There are no miracle solutions when countries can’t pay their bills. There are no quick fixes … There’s no sticking the costs to one party. Everyone is going to lose a little: banks, governments, the people….
Europe will stumble from crisis to crisis until it finds what works. Everything it’s done so far has been too little too late. … Those who’ve already lived through a crisis of this type, as Latin Americans have, know that a moment comes when the only way out is for everyone to sit down at the table to divvy up the losses.
Several countries in Europe will only escape this crisis by way of a Brady-style Plan. But remember this: the generalized bankruptcy in Latin America started in September of 1982 and the solution for the Brazilian debt was only put in place early in the 1990s when the economist Pedro Malan began negotiating with the foreign banks and they exchanged the old debt for new at a deep discount….
The big unknown in Europe is that this is a sovereign debt crisis in a large region with a single currency. Here, [in Latin America] with our crisis, at least each country had its own currency, it’s own debt, and the economies weren’t as interconnected as they are now.
Original blog column in Portuguese:
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