Argentina could make unfortunate history this week if it defaults on its foreign debt for the second time in 13 years as a showdown with creditors comes to a head, according to an analysis in today’s Wall Street Journal. When Argentina last defaulted on this debt, in 2001, it was the biggest sovereign default ever. The seeds of the current drama were sown not long after that, when investors bought the country's defaulted bonds but never accepted its terms for restructuring the debt. Now they are standing in the way of payouts that would avoid a default this week. Although there is little fear of contagion for other emerging markets and minimal concern Argentina would suffer the kind of economic implosion of 13 years ago, a default still could cost one of Latin America's biggest economies dearly, keeping it shut out of international credit markets and crimping credit to companies. It also could complicate the transition to a new government after next year's presidential election.
