The middle classes were begging for food in the street
In the week Michael Noonan warned about the apocalyptic effect of default, two Argentinians recall what it was like for them 10 years ago
The elegant woman at the front door wore a fur coat and coiffed hair -- but she was not calling to invite her neighbours to a dinner party. This was Buenos Aires 2001 and Elsa Gutman -- a member of the once burgeoning middle class -- was knocking to see if the occupants of a nearby house needed any DIY or plumbing repairs.
Peddling her husband's handyman skills -- he had lost his job in a bank the previous year -- was the only way for this former teacher to pay her bills and survive: a predicament once thought impossible for urbane elite of the city known as 'the Paris of South America'.
This week, Finance Minister Michael Noonan forecast that the Irish middle class could suffer a fate similar to the Argentinian middle class of 2001 if Ireland defaulted on its massive debt.
He said: "I remember when Argentina defaulted and it wiped out the savings of every middle-class family in Argentina. They were searching the rubbish bins to try and feed their kids.
"People who never had a poor day in their lives were in penury and they got totally wiped out."
Mr Noonan's apocalyptic warning came after Independent TDs Shane Ross and Stephen Donnelly advocated a limited Irish default.
"The price paid by ordinary people in both Argentina and Russia at the time of default, and for a couple of years after, was a very, very high price indeed," Mr Noonan warned.
Osvaldo Guariglia (72) a former professor at the University of Buenos Aires, is all too familiar with the high personal price of a default.
When the country defaulted in December 2001 after three years of crippling recession, the retired philosophy professor lost more than 60pc of his government bond savings and watched others around him sink into depression and despair.
"It was really bad," Professor Guariglia told the Weekend Review in an interview from Buenos Aires. "Income was halved. Food and gasoline prices doubled overnight.
"The greatest impact was for the lowest class of population but the middle class also suffered in terms of income and cost of living rises."
Diego Kaplun Carmody (55) also watched in despair as the Argentinian economy crumbled in 2001 after an orgy of inflation, rising foreign debt, aggressive free market policies and a strict exchange rate that pegged the peso to the dollar.
Employed with a "good job" by a Canadian company in Buenos Aires, Mr Kaplun Carmody was alarmed to see well-educated friends suddenly out of work as roughly 25pc of the population was plunged into unemployment.
"People had to sell their property," Mr Kaplun Carmody told the Weekend Review. "They were applying for jobs -- any jobs. One day you're an important manager and the next you're applying for a much lower paid position. You would see a lot of engineers driving a taxi."
Many middle-class Argentinians and the unemployed found work as 'cartoneros', or cardboard collectors. Pushing carts packed with rubbish, the cartoneros roamed the streets of Buenos Aires from early dawn collecting cardboard that they would later sell to recycling plants. Some had once worked in the same high-rise offices they now scavenged rubbish from.
"It certainly affected the middle class," remembers Mr Kaplun Carmody. "But if the middle class were affected, the poorer class were much more severely affected."
As the value of Argentina's currency plummeted, the savings of middle-class Argentinians began to disappear and some had to resort to begging on the street for food. During the height of the crisis, nearly 60pc of the country -- which a century earlier had been one of the world's richest -- was living at or below the poverty level.
As the crisis deepened, the Government imposed strict limits on how much Argentinians could withdraw from their dwindling accounts. "I knew a lot of people who couldn't take their money out of the banks," said Mr Kaplun Carmody who at the time was allowed to withdraw just 300 pesos a week.
"The atmosphere was very bad. Everybody was tense and nervous and really upset."
That's when Mr Kaplun Carmody and his wife decided to quit their beloved homeland and emigrate to Ireland. Two of their children, their eldest son and youngest daughter came to Ireland. Another daughter chose to stay behind.
Mr Kaplun Carmody, whose grandmother from Co Clare had emigrated to Argentina 90 years earlier, remembers crying families at the Buenos Aires airport bidding farewell to their emigrating sons and daughters.
"We came over because the situation over there was really, really, really bad. And the social atmosphere was terribly bad," he said.
"In my own opinion, the atmosphere was getting close to a civil war -- it's hard for me to identify who the sides would be -- but basically it was more or less the wealthy against the poor."
Mr Kaplun Carmody, who works as a senior buyer with the M+W Group, believes the situation in Ireland is not as precarious as Argentina and that Mr Noonan's warnings may seem a little dire.
"Unlike Argentina, Ireland has a long history of emigration. I don't ever anticipate seeing people eating out of bins in Ireland," he said, "but I do see more of them leaving the country."