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The seriousness of the sovereign debt crisis in the euro area has led to a study of historical precedents that can provide insight into which solutions might be the most appropriate. This Economic Paper explores the analogies that might be drawn between the present episode and the Latin American debt crisis three decades earlier. After reviewing its origins and development and the strategies employed to resolve this crisis, two broad conclusions appear to be applicable to the current situation in Europe. Firstly, it will probably take a relatively long time for the euro area's debt crisis to be resolved once and for all. Secondly, the measures taken to resolve the crisis should avoid depressing growth as this is crucial to improving the future sustainability of debt.

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