The Argentine model for Spain?

Over at Slate, and with breathtaking casualness, Matthew Yglesias suggests that Spain think about ditching the Eurozone. He holds up Argentina’s 2002 abandonment of the dollar peg (and subsequent default) as a model for Madrid: Piggybacking on the dollar ultimately failed Argentina, because pegging to the dollar didn’t suddenly turn Argentina into the United States. ...

By , a professor at Indiana University’s Hamilton Lugar School of Global and International Studies.

Over at Slate, and with breathtaking casualness, Matthew Yglesias suggests that Spain think about ditching the Eurozone. He holds up Argentina's 2002 abandonment of the dollar peg (and subsequent default) as a model for Madrid:

Over at Slate, and with breathtaking casualness, Matthew Yglesias suggests that Spain think about ditching the Eurozone. He holds up Argentina’s 2002 abandonment of the dollar peg (and subsequent default) as a model for Madrid:

Piggybacking on the dollar ultimately failed Argentina, because pegging to the dollar didn’t suddenly turn Argentina into the United States. Similarly, adopting macroeconomic policies made in Frankfurt and Berlin doesn’t give Spain Germany’s fundamentals, it just saddles Spain with policies that are designed for Germany. A full monetary union is not the same thing as a currency peg, and unwinding the euro would wreak even more short-term havoc than Argentina’s default. But an economically sovereign country at least has the opportunity to get things right, while a country shackled to another nation’s macroeconomic policies is basically left hoping for charity. If officials in Spain and elsewhere aren’t considering the possibility of quitting the eurozone, they should be.

David Bosco is a professor at Indiana University’s Hamilton Lugar School of Global and International Studies. He is the author of The Poseidon Project: The Struggle to Govern the World’s Oceans. Twitter: @multilateralist

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