BUENOS AIRES, Argentina — TEN years after declaring the biggest debt default ever, Argentina has emerged from the crisis by rejecting the austerity measures now being put in place to shore up the eurozone.

It was a period of tremendous upheaval for the key South American country, which saw five presidents in two weeks, 33 dead, thousands of people pouring into the streets in fiery protests, hundreds of children scouring through trash for food and unbridled vandalism.

“What did we do? We said that the dead do not pay their debts and that, in order to honor them, we had to first renew growth,” President Cristina Kirchner said last week as she called the European debt crisis a “reflection of Argentina in 2001.”

Her late husband and predecessor Nestor Kirchner, president from 2003-2007, boosted consumer confidence by encouraging reduced borrowing rates and making more subsidies available.

And the policy worked. Since 2003, the country’s average economic growth has been around nine per cent, with the exception of 2009 when the economy grew a modest 0.9 per cent in the midst of an international crisis.

Consumption is booming and unemployment has stabilised at around seven per cent.

“The European crisis is similar to Argentina’s crisis,” said Belen Olaiz of the Abeceb economic analysis institute. “The austerity measures and deflation showed no positive results,” she told AFP.

But International Monetary Fund chief Christine Lagarde has rejected the comparison, noting that those European countries that are now underwater have the support of their European partners.

Just as eurozone countries are struggling today to save their monetary union, Argentina first tried to keep its peso pegged to the dollar, as required by law. It agreed to an IMF austerity plan and faced a long recession and rising unemployment.

But on December 1, 2001, a freeze on all deposits, aimed at halting a run on the banks

and shoring up financial institutions, triggered the country’s biggest economic and social crisis.

Four days later the IMF refused a US$1.26 billion (108.7 billion) loan to Argentina, meaning the country could no longer meet its obligations. On December 23, the government declared the biggest debt default in history, US$100 billion.

It then took the extraordinary step of refusing to negotiate with creditors, instead imposing its own conditions. By restructuring its debt, Argentina was thus able to secure a 75 per cent reduction.

Talks have since dragged on for years to reach a deal with the Paris Club on a plan to repay the US$6-8 billion Argentina still owes to creditor nations.

Yet this approach, the flipside of the one now underway in the eurozone, would not succeed in struggling European countries like Greece.

“This model was possible because the world changed radically,” said Marina Dal Poggetto of Bein & Associates. “Prices for raw materials like soy have quadrupled, the dollar has weakened and interest rates have remained low.”

The Kirchner model also has its Achilles heel — a 35 per cent annual increase in public spending and an inflation rate of between 25 and 30 per cent this year, according to economists.