Abstract
In 2001, Argentina, the former model pupil of the International Monetary fund of the nineties, declared default in all its public debt. This is one of the most harrowing economic crises in the history of Argentina. Several crisis-fighting actions like the freezing of bank accounts or the devaluation of the peso by more than 75% led to far-reaching socio-economic consequences for the people, in addition to a loss in the financial and political sector of the country. A large part of the Argentinean middle class became unemployed, which caused riots in the streets, leading to political unrest and bringing down several governments in a row. This made crisis management very difficult, since there was no strong political leader to properly fight the situation. Also the military did not step in, as it has done previously during crises. Argentina still has not recovered from the crisis, which got known as the largest debt default in its history. Even though the economy improved strongly after 2002, living standards only improved finally in mid-2003. Accordingly, Argentina still has a long way for recovery ahead. This paper will try to give an overview of how the crisis evolved over time, and how it was possible for a recession starting in 1998m, to develop to a full grown crisis, taking such huge dimensions and causing the first economic depression of the 21st century. Possible sources of this crisis were examined, for example possible contagion effects of the Russian Crisis in 1998. Of particular interest will be the investigation of the main players in this tragedy and their role in the crisis, namely the International Monetary Fund (IMF) and the Argentinean Government. The question arises whether the policies and efforts of both the institutions were adequate for the situation preceding the crisis.
