Question

Name one similarity and one difference to the Argentinean currency crisis of a few years ago to the Euro based on the Greek crisis over the last year.

Answer 1

Answer-

The similarities of Argentinean currency crisis of a few years ago to the Euro based on the Greek crisis over the last year.

Approximately one decade prior to their respective defaults both  Argentina and Greece adopted new currencies and, by doing so the two countries forfeited their free monetary policy.

Argentina restricted the central bank to issuing new pesos against new foreign exchange reserves and maintained its own currency that equated closely to dollarization ( as it pegged one peso to one US Dollar) . Similarly, Greece adopted the euro as part of the European Monetary Union in 2001.( peso is the currency of Argentina).

The difference is

The imbalances troubling the Greek economy are unprecedented in scale compared to Argentina as the mounting debt crisis is higher in Greece. This led to quick recovery of Argentinian economy compared to Greece.

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