by Stephen Brown & Philip Blenkinsop
Reuters
September 15, 2011
Some politicians in Europe air the view that an "orderly" Greek debt default should be discussed, but history suggests it would be a very messy affair unless euro zone leaders agree to make preparations and ring-fence the banks.
Commentators who favor a default for Greece, believing other options just delay the inevitable, often cite Argentina's default in 2002 -- and subsequent strong economic growth -- as an argument that it need not be too painful.
"If Europe is taking us as an example, they must be in even more trouble than I thought," observed economist Aldo Abram in Buenos Aires. He recalled that the president who declared the biggest sovereign debt default in history, Adolfo Rodriguez Saa, lasted a week and was one of four presidents in a month.
If Greece follows Argentina's desperate path of devaluation and abrupt debt default, said Abram, "they will be condemned to poverty and will see their banking system destroyed."
European leaders are adamant that Greece will not default, let alone leave the euro zone, and want parliaments to ratify a second bailout package for the debt-laden country which has so far failed to deliver on reforms set as a condition for aid.
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