The Rise and Fall of the Patria Financiera
The Rise and Fall of the Patria Financiera
This chapter traces the rise and fall of Argentina's version of the “bankers' alliance” over the course of the crisis. The state's growing dependence on credit over the course of the 1990s initially strengthened the position of those considered to be most capable of attracting foreign credit and investment, and fulfilled a bridging role to foreign lenders. As the crisis began to bite, however, the social costs of austerity and structural adjustment gradually eroded the legitimacy of the political establishment and the country's democratic institutions more generally, leading to mass demonstrations and a demonstrable shift in popular preferences from repayment to default. The citizens' revolt eventually forced President Fernando De la Rúa and economy minister Domingo Cavallo from office, causing the third enforcement mechanism of internalized discipline to break down. The popular uprising was therefore the final push that eventually made the inevitable unstoppable.
Keywords: financial crisis, debt crisis, Argentina, sovereign debt, default, bankers' alliance, foreign credit, foreign investment
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