The situation of Argentina is complex. There are no easy solutions and there is no doubt that some fundmental change will be required before the country can begin to limp its way out of caos. What has happened appears to be a case of the road to Hell being paved with good (and perhaps bad) intentions and the right thing (at least in the short run) going rather horribly wrong. It's a case of corruption, inaction, and the danger of pegging the value of a domestic currency to something that is beyond national control unless a country is willing to undertake the kind of restructuring that EU membership requires.
The reason for pegging the Argentine peso to the US dollar was runaway inflation, but it soon became obvious that the peso was greatly overvalued. It was too easy a solution. How else might it have been done? Perhaps a price and wage control board with strictly enforceable powers? Perhaps a restructuring of the tax system that required people to pay up or face extreme penalties, thus reducing the government's dependence on deficit financing based on foreign loans? And in the longer term, perhaps a concerted drive to move the country away from corned-beef exports to more value added manufacturing? And also in the longer term, making Mercosur into a viable economic union instead something that sounds nice in politicians' speeches. It is probable that what we have seen this past week is only the beginning. Somewhere in the wings, the ghost of Jaun Peron is waiting. Ed Weick
