In the case
of Cyprus,
I think that the
small size of
the country
played against
giving rational
considerations
and providing a
more careful
assistance
package
GUILLERMO NIELSEN
Gold: You were Secretary of Finance
in Argentina during a period of acute
economic crisis and subsequent recovery.
How difficult was it for you as a politician
taking very unpopular and difficult
decisions?
Guillermo Nielsen: To begin with, I am not a
politician. I am an economist used to working
with politicians and with lawyers in the area
of policy. The Argentine crisis exploded in
late December 2001 and the following month
I was appointed to the Board of the Central
Bank, during the most important banking
crisis and bank run in our history. In May, as
a result of a political reshuffle I was appointed
Secretary of Finance and in that role I had to
head the negotiations with the IMF. Later, I
led the restructuring of the Argentine private
debt. They were very difficult times and,
for me. one of the most costly incidents in
emotional terms was in Japan, where I had
to meet a large group of defaulted investors
– most of them retirees or elderly widows
who had invested in Argentine bonds to get a
better return and, instead, found themselves
suffering. In terms of policy decisions,
devaluation had already taken place by the
time I reached the Ministry and the political
crisis gave us tremendous power in terms of
decision-making freedom. In the early stages
we did not have any political interference
whatsoever, other than what the IMF tried –
unsuccessfully – to impose.
Gold: You have seen how several bailouts
have been imposed in Europe. The Irish
one appears to have worked but is the
Troika taking the right decisions?
G.N.: I am critical of the way these bailouts
have been imposed on Greece and Cyprus.
The lengthy decision-making process of the
European institutions does not work in favour
of tackling economic crises effectively and I am
afraid that the degree of political interference
then & now
G
uillermo Nielsen was
Secretary of Finance
of Argentina between
2002-2005. He negotiated
two stand-by agreements
with the IMF and was also
in charge of the private
debt restructuring – which
was the largest at that time,
requiring a deep haircut and
involving negotiations with
banks and investment funds
in the USA, Europe and Japan, and with retail investors
in Italy, Japan and Argentina. Today he is President
of Strategic Investments, an
Argentine company dedicated to providing financial engineering schemes, primarily
in the energy sector.
the international investment, finance & professional services magazine of cyprus
Gold 63