"The good news is that we have a package, the volatility of the international markets is lower, and maybe it’s the starting point for a recovery of the economy," Boudou told Bloomberg Television in an interview in Rome today.
Greece reached an agreement on the terms of a three-year package of 110 billion euros ($145 billion) in loans after pledging to push through budget cuts worth 13 percent of gross domestic product. Argentina defaulted in 2001 on $95 billion of debt after the expansion of its economy, South-America’s second largest, spurred demand for the country’s government bonds.
"The main issue is outside the package," Boudou said. "The Argentinean lesson is that it’s very important to catch the opportunity of improving the whole system, mostly the real economy."
Sacrifices, Default
Domingo Cavallo, the former Argentine economy minister who sought to avert the default, said in an April 30 interview that Greece must carry out an "orderly restructuring" of its debt to restore solvency and avoid his country’s fate. A debt swap, measures to restore competiveness and spending cuts would help the government in Athens to cope with the crisis, he added.
Greek unions representing more than 500,000 civil servants called today a 48-hour strike starting May 4 after rejecting Prime Minister George Papandreou’s appeal for citizens to accept more sacrifices in order to stave off default.
The Greek crisis "is a very difficult situation and has lots of similarities" with Argentina’s problems in 2001, Boudou said. "It’s true that they need financial help and it’s very important the effort of the international community to provide it, but otherwise it’s important to help and care about the real economy, employment, capacity of export."
Boudou was in Rome to present his government’s offer to exchange about $20 billion in defaulted bonds held out of a 2005 settlement. That agreement and today’s "swap show different ways to negotiate with creditors," he said. "A way that allows the country to manage both a sustainable debt situation and growth in real terms."
