Fewer dogs prove how Argentina's grand lady has fallen on hard times

City Life: Buenos Airies

The small hotel where I'm staying in Buenos Aires is two doors away from Café Tortoni, the oldest coffee shop in Argentina. The café was founded in 1859 and, says the blurb on the back of its menu, it "has a very rich history, visited at all times by intellectuals, politicians and artists". Naturally, I've made it my second home.

The small hotel where I'm staying in Buenos Aires is two doors away from Café Tortoni, the oldest coffee shop in Argentina. The café was founded in 1859 and, says the blurb on the back of its menu, it "has a very rich history, visited at all times by intellectuals, politicians and artists". Naturally, I've made it my second home.

Included in that same text are quotations by some of the luminaries who have frequented Tortoni during the past 140 years. Most of the names are unknown to me; but I recognise Federico Garcia Lorca, King Juan Carlos of Spain and Hillary Rodham Clinton, who remarked what a treat it was "to visit a piece of history and enjoy its ambience". And the senator is right: the café's size and its opulence speak of a time when Argentina was rich and confident.

Only 60 years ago Buenos Aires was the capital of the seventh wealthiest nation on earth. Throughout the city centre with its broad boulevards, its gardens and parks, its museums, monuments and art galleries – everywhere is evidence of great riches. But now Buenos Aires is like a grand lady who has fallen on hard times. The smart shoes are down at heel and all the jewellery is at the pawnbrokers. It is the capital of a virtually bankrupt country, with a debtof $130bn (£90bn). Plans for a massive debt swap were being unveiled yesterday to stave off bankruptcy, but fearing devaluation many Argentinians have been racing to convert their pesos into dollars.

According to local folklore, one of the most sensitive measures of the city's economic health is provided by the dog-walkers. These people, surrounded by their packs of canines, are a charming bit of Buenos Aires street life; and I'd been assured that the more numerous the dogs, the greater the prosperity. To check it out, I went to one of the city's parks. It didn't take long to find them. There were three walkers and about 30 dogs engaged in noisy congress. When order had been restored, I had a word with one of the walkers. Maria Patricia confirmed that the number of her charges had declined in line with the economy; now instead of the 21 dogs of a year ago, she is down to 12. Most of her clients live in the luxury flats overlooking the park and many of them have lost their jobs and moved away.

Just how bad things are became clear on my last visit to the Café Tortoni. The place is staffed by a team of elderly waiters with long aprons and beautiful manners. One of them had been especially helpful and I gave him what I thought was a generous tip. "I'm so sorry sir," he said, returning my currency, "but we do not accept patacons." He explained that what I held in my hand might look like money but was not money. I had been given the note among some change and had failed to notice that beneath "10 pesos" were printed the words "valor nominal", nominal value. Nor had I noticed that the note was issued by the Province of Buenos Aires followed by the words "treasury letter for the settlement of debts" with "patacon" in brackets. The waiter explained to me that the province is so broke that the only way it can pay its employees is to print these patacons.

In theory they are local government bonds. But it is perhaps significant that the Government will not take patacons in settlement of taxes. I still haven't managed to spend my patacons and as I examine them, I notice that in very small print on the back of the notes are the relevant articles of law number 12727 that introduced the patacon. Article eight promises to pay 107 per cent of the face value of the note on 25 July 2002 – almost in time for my birthday; but I shall not be relying on it.

The correspondent reports from Argentina for BBC Radio 4's 'Crossing Continents' on Thursday, 8 November at 11am.