The article begins by analyzing the economic history of Argentina during the last decade. It then goes on to explain the cause of its demise. The article is very explicit in regards to who is at fault. It blames an autonomous government for the done fall of the once vibrant Argentinean economy. Investors referred to the government as "the hoodlums running Argentina". The countries economist Mr. Blejer is trying to drum up foreign support in order to build domestic confidence.
The impression I got was that the government is relying on the IMF for a bailout. The restructuring that went on in the past decade was not in response to the ailing economy but to the revenue-less government. For example they privatized state-owned companies which obviously formed a private monopoly, leaving customers not much better off. The devaluation of the Brazilian real did not help Argentina's cause, it made it harder for the country to be competitive in that part of the hemisphere.
With all things considered, it is the Argentinean government that needs to reform and change its focus if it wants to self correct.
The banking system in Argentina is in disarray. The article discusses a private-sector banking problem that has caused sufficient distress on the overall economy. The country's largest bank, Banco de Galicia has a pill of debt denominated in the dollar. This has made it hard for the bank to pay back that debt now that peso is free-floating. This has caused the bank to seek assistance from outside creditors for a bailout. The bank needs creditors who will trade debt for equity since the government, which normally assists the bank, is not fit to do so.
Banco de Galicia has seen a significant drop in its deposits over that past months. Even shareholders are pessimistic about the banking system. One major Galicia shareholder said "no bank in the world could survive the situation here unharmed." Galicia owes about $1.7 billion of dollar-denominated debt but only a portion would be swapped under the bank's proposal. The only maneuver the government might make is to issue as much as 30 billion pesos of bonds to help the banks.