‘Corralito’ is still trauma in Argentina 20 years later

An audio containing fake news has quickly gone viral in Argentina in recent weeks, causing an uproar and concern. It contained an alleged government plan to implement a new “corralito” in the country, similar to what was done in 2001, due to the chronic shortage of dollars in the economy.

The furor that fake news has provoked in the country shows the magnitude of the trauma that the measure has left in Argentines to this day – and made authorities rush to deny it.

20 years ago, in the midst of a strong economic crisis, the population rushed to the banks and, in about three months, withdrew around US$ 22 million from their accounts. At the time, the country’s economy was dollarized. To prevent the drain of resources and a consequent serious liquidity problem, the government proposed a mega bank confiscation, limiting withdrawals to 250 pesos (equivalent to US$250) per week. Around US$70 billion were frozen in the banks.

Announced by the then Minister of Economy, Domingo Cavallo, on December 1, 2001, a Saturday, the corralito was put into practice on the following Monday, December 3rd.

Angry, the Argentines attacked banks, tried to break into branches to withdraw their money, and filed lawsuits. At the same time, a climate of social tension quickly escalated and was brutally repressed. In all, 39 people died, according to the Secretariat for Human Rights.

The crisis would completely get out of the control of the then president, Fernando de la Rúa (1937-2019), who ended up resigning on December 20 and shamefully abandoning the Casa Rosada aboard a helicopter, which took him out of the country.

The country was adrift and had five presidents in a period of 11 days, until Eduardo Duhalde assumed the task of organizing the chaos in a minimal way.

Now, in addition to officials, respected economic figures, such as former Central Bank president Martín Redrado, highlighted that, as critical as the Argentine economic situation is today, there is no reason for a new bank confiscation.

“During the convertibility period, when a peso was worth a dollar, there was no American currency for all the pesos that were in the banking system. Therefore, if everyone wanted to make withdrawals at the same time, the system would fail. said Redrado.

“Now the dollars exist. In addition, the Central Bank, since 2003, has had very specific regulations that ensure that Argentine dollar deposits are backed by loans to companies that generate dollars.”

distrust

Journalist Maria O’Donnell, author of the books “Aramburu” and “Born”, says that even with these guarantees, and despite the regulations, well-informed people believe that a new confiscation could occur.

One of the long-term consequences of the move taken 20 years ago was Argentines’ distrust of their banking system. Although the practice of storing dollars at home or in vaults had been around since the periods of hyperinflation in the 1970s and 1980s, the custom became more intense after 2001.

“What made people most desperate at that time was the corralito, not being able to access their money, and also the lack of social control, the unrestrained violence, it was a very big uncertainty regarding what was going to happen”, says O’Donnell.

Researcher Claudio Negrete reinforces that Argentines’ belief in banks only lasted during convertibility, when the peso was equivalent to the dollar. Before that, and after, mistrust reigned.

“The convertibility had been a measure to curb inflation, and it worked for a while, but it wasn’t an economic plan. Once convertibility ended, people left the banks and started not trusting them again. , with digital transactions, but it is very incipient”, says Negrete.

“The year 2001 was a very painful event. It left a very strong mark on Argentines, it’s something difficult to remember. But not having a memory is much more painful, because the pain of not having a memory affects the future, our children, our grandchildren and society as a whole”, says actor Ricardo Darín, who lived as one of the many Argentines who lost a fortune with the corralito and whose lives and those of his family and friends were transformed in the film “A Odisseia dos Fontos”.

This Sunday (5) the History Channel premieres the documentary “2001 – El Año del Corralito”, narrated by Darín.

Historian Felipe Pigna, on the other hand, rescues positive aspects of corralstone. “The consequences were not good, it was hard to see families falling into poverty, people going to live on the streets, but at the same time the Argentine’s spirit of survival was put to the test, and we knew how to survive. Cooperatives and assemblies were set up in the neighborhoods to resolve people’s problems, there was solidarity,” he recalls.

In his case, he also claims that there was greater interest in the country’s history.

“People wanted to know how we got to where we are, so there was a renewed search for my books, plus people put Argentine flags in the windows and sang the national anthem. I think it taught us a lesson.”

Pigna is the author of a popular series of popularization books called “Myths of Argentine History”, as well as biographies of several famous people.