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GOVERNMENT FINANCE AND PUBLIC MONEY
Why governments fail financially
Borrowing
increases
DEBT RISES
Borrowing
increases
DEBT RISES
- Argentina’s
repayments are
still too small to
control rising
levels of debt.
3. Its repayments
fail to bring debt
under control. - The countries it has
borrowed from lose
faith in Argentina’s
ability to pay. - Argentina
borrows heavily
from elsewhere
in the world.
$
$
$ $
$$
DEBT
- Argentina fails
to meet conditions
set out by the IMF - The IMF on deficit targets.
withdraws
its economic
support. - The value of
the currency
plummets. - A run on the
banks leads to
the government
freezing deposits. - Argentina
cannot repay its
$120 billion debt,
and defaults. - Argentinian
unemployment
reaches 20%. - Civil unrest
and rioting
break out.
Argentina
defaults
- A period of
political instability
sets in.
16. Agreements
on repayments
in 2002 help
promote a boom.
Argentina
e
n
te
r
s
a
d
e
b
t
s
p
i
r
a
l
$
€ 107 billion
amount of Greek debt
written off i n 2012
US_146-147_How_Gov_fail.indd 147 13/10/2016 16:19