Argentina ought, generally, to be an an economic role model only for the insane, but, so far as Greece is concerned, expect to hear more of this sort of talk:

Greece should default on its bonds to stop a deterioration of the economy, said Mario Blejer, a former Bank of England adviser who took the reins of Argentina’s central bank after its 2001 default on $95 billion. “Greece should default, and default big,” Blejer, who was an adviser to Bank of England Governor Mervyn King from 2003 to 2008, said in an interview in Buenos Aires. “You can’t jump over a chasm in two steps.…It’s totally ridiculous what is going on,” Blejer, 63, said. “If you assume that these countries do everything that is in the program, they do all these adjustments and privatizations, at the end of 2012 debt-to-GDP will be bigger than this year…Blejer took the reins of Argentina’s central bank for five months starting in January 2002, when the country was reeling from the effects of the biggest sovereign default in history and the loss of four presidents in just over two weeks. The government had just ended the peso’s one-to-one peg with the dollar when Blejer accepted the position from then-President Eduardo Duhalde. To help stabilize the currency after the devaluation, Blejer created short-term bonds known as lebacs that paid an annual interest rate of as much as 140 percent, he said. Argentina’s economy shrank 10.9 percent in 2002 before starting a nine-year growth streak, aided by rising commodity prices and an expansion in neighboring Brazil.

Blejer, however, appears to argue that Greece will have to stick with the euro (for more of his views on this, see here – and note also that he was, in the wake of Argentina’s abandonment of a peso/dollar peg in early 2002, an advocate of the dollarization of the country’s economy). This would mean that a large chunk of Greece’s competitiveness problem will remain. So far as Greece is concerned membership of the euro has been a classic example of putting the cart before the horse. Believing that euro membership would enable Greece to keep up in a German-led currency union was roughly analagous to putting a Porsche badge on a Trabant and then expecting the Trabant to be an Autobahn racer. It’s also not obvious what commodity Greece has that is about to come to the rescue (Argentina has done well out of its strong agricultural base). Nevertheless, food for thought . . .

Meanwhile, Hans-Werner Sinn, president of Germany’s influential IFO Economic Research Institute (and a supporter of the euro), has written an article for Handelsblatt arguing that his country should not be bullied into giving in to all the demands now coming its way. To make the point that Germany has alternatives, he argues that the cost to its economy of a restoration of the D-Mark would be rather less than is sometimes claimed.

Interesting times.