In 2001, Argentina made a drama out of a long-standing economic crisis. For nearly four years, its economy had spiralled downwards, as successive governments tried to impose enough fiscal austerity (cuts in social spending) so Argentina could pay its public debt. But the debt was unsustainable and the austerity was never severe enough.

woman and wall On November 1, a solemn President Fernando de la Rúa asked foreign and domestic creditors to accept lower interest rates and longer maturities on $95 billion in Argentine bonds. Later that month, amid predictions that the government would post a $7.8bn deficit in 2001 - $1.3bn higher than agreed with the International Monetary Fund in August - an IMF mission arrived in Buenos Aires to examine the accounts. On December 5, the IMF withheld a $1.264bn loan disbursement.

Economic collapse was in the air. There was a run on the banks, as depositors rushed to get their money out and convert their pesos into dollars. Economy minister Domingo Cavallo imposed a corralito, a little fence (or playpen), to limit the amount of cash they could withdraw - and the people rose in protest. Cavallo resigned.

In a televised address to the nation, de la Rúa declared a state of siege: "Many enemies of the Argentine Republic are taking advantage of the economic and social situation to sow discord and violence, seeking to create chaos to enable them to achieve what they could not at the ballot box." It was a ridiculous speech, but it reminded too many people of the years of the hated military dictatorship.

There followed the Argentinazo, what Naomi Klein calls "a chaotic explosion of Argentinian-ness, during which hundreds of thousands of people suddenly and spontaneously left their homes, poured on to the streets of the capital, banged pots and pans, yelled at banks, fought police, revved motorcycles, sang football anthems and managed to send the president fleeing his palace in a helicopter".

In the next fortnight, Argentina went through five presidents. Adolfo Rodríguez Saá stayed a week, just long enough to default on the $95bn debt - the largest sovereign default in history. Eduardo Duhalde took over at the beginning of 2002, and broke the peso's peg to the US dollar: the peso fell like a stone, eventually losing almost three-quarters of its value.

"We are in collapse. Argentina is bankrupt," said the new economy minister, Jorge Remes Lenicov. The caretaker government turned to the IMF for help.

Help was slow in coming.

Teach yourself Argentine

Argentinazo: the December 2001 popular uprising that led to the collapse of the de la Rúa government
Asambleas barriales, populares, vecinales: neighbourhood or popular assemblies - direct democracy in action
Bailout: An IMF loan. But it is foreign bankers and bondholders and Argentina's ruling elite that are bailed out. Ordinary Argentines, especially the poor and destitute, are tossed overboard.
Cacerolazo: A protest in which demonstrators beat on empty pots and pans. Good for letting off steam
Cartoneros: At least 100,000 people who scavenge through the rubbish in Buenos Aires, looking for enough cardboard to make $2 a night so that they can eat
Desaparecidos: The "disappeared", more than 30,000 people murdered by the military dictatorship (1976-1983)
Fábricas tomadas: Bankrupt factories, abandoned by their owners, taken over by their workers and reopened as cooperatives
Piqueteros: "Pickets", groups of unemployed workers who routinely block the roads to press their demands for emergency relief and benefits
Que se vayan todos: kick them all out (what Argentines think should be done with their politicians)

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