The former economy minister Domingo Cavallo came to question the Nobel economist Paul Krugman, who in an article on the crisis facing the eurozone outlined that one of the outlets for these countries could be "100% Argentina", ie abandoning the euro.

Cavallo Krugman refutes the argument that says that the path breaking Argentine convertibility quickly allowed out of economic depression, drama now facing, especially countries like Europe, Greece, Portugal and Ireland, which they suggest, as one option among others, out of the Euro in order to devalue their currencies and become more competitive.

A Cavallo this idea does not like it. And so it responds to the American economist, "Krugman argues that 'resist the gale' and maintain currency convertibility regimes has exaggerated costs recession and that recovery will be very slow. Notes as an example the case of Latvia, Estonia and Lithuania, where wages fell 15% in the first case, and 10% in the other two suffered declines in GDP to levels of economic depression. What Krugman does not mention is that in Argentina, who had already suffered a recession in almost 15% by the end of 2001, with little drop in wages because of the abandonment of convertibility in 2002 GDP fell another 10% and wages fell in real terms, over 30%. "Cavallo follows:" Nor does it mention that the rapid recovery after 2003 was due to an unprecedented pace of improvement in the external terms of trade, despite of this boom, the economy was dangerously undercapitalized in key sectors. And as if this were not enough, is experiencing very high levels of inflation compared to other countries. "It is clear that to 9 years of the collapse of convertibility, Cavallo still stands strong.

Source: Clarin