One could easily be in the middle of a magnificent throbbing European metropolis. In fact, the city is a harmonic convergence of the combined talents of the British, French, Spanish and Italians, minus the ancestral quarrels.

Although Argentina is not technically European, no one told the Argentines.

Argentina is a mystery. In 1940, the world's eighth largest country had the seventh richest economy. Today, the acreage is unchanged, but the economy has shrunk. From world power to care in the community, Argentina in some ways looks like an epic tale of underachievement, like watching a man squander an inherited fortune.

Recently things have begun to look up, however. Prices are still low, but the portenos are on a high. Five years after the financial crisis of 2001, when the peso crashed overnight, the place is throbbing. Creativity in design, art and fashion is back on the agenda.

Each district of Buenos Aires radiates its own distinct character. Palermo is the recently rediscovered oldest part. Its three neighbourhoods are Palermo Viejo, where Jorge Luis Borges lived, which is all cobblestone tree-lined streets, turn-of-the-century facades, and great doorways leading to shady patios; Palermo SoHo, which is the fashion district; and Palermo Hollywood, where directors, photographers and television studios operate.

San Telmo, the one-time aristocratic quarter until yellow fever struck in 1865, is now the bohemian area, bustling with antique shops.

Fans of vintage clothing should check out Gil Antiguedades. At the Sunday flea market, you can see the tango performed. The tango is also on a roll . . . ironically, since it expresses the sadness of poverty, homesickness and of the man never getting the woman. It is also fiendishly difficult to master. Today, contemporary artists, like Bajo Fondo Tango Club and Cristobal Repetto are re-discovering the tango.

Recoleta is the gold-plated district of the city, sporting a magnificent anthology of belle epoque architecture as well as the Alvear Palace hotel. The Avenida Alvear, Buenos Aires's biggest catwalk, "is like 5th Avenue but without the stores", according to one fashionista.

La Boca is the rawest, poorest area near the port, and home of the tango and Boca Juniors football club, Diego Maradona's club in the early '80s. The brightly painted houses are a tradition dating from the Italian immigration.

With their customary flair for improvisation, the Italians hammered and riveted their dwellings from the tin that the empty cargo ships from Europe carried as ballast, and daubed their exterior walls in rainbow colours.

At Rond Point, a chic new restaurant that typifies Buenos Aires's post-crisis renaissance, I met Dereck Foster, a porteno (Buenos Aires citizen) of English descent, who is a bilingual walking encyclopaedia of latino gastronomy and Argentine history, as well as the food and drink editor of the Buenos Aires Herald.

Eight years earlier, we'd discussed Argentina's decline relative to the rise of the United States, despite having similar racial mixes.

"Yes, but whereas the Americans have a sense of being American, we're not sure who we are, " he had replied. "We have no sense of community feeling. The Spanish have an expression: 'Everyone kicking towards their own goals.' The only symbol of national unity is the Argentine national football team, so long as it's winning."

Eight years later, we meet again. He feeds me news of the food scene. "The trend over the last two years has been towards ethnic cooking, " says Foster, examining a dish of poached Pacific salmon and grilled toothfish (Antarctic hake) as though for flaws.

"The Asian and North Africa cuisine here is the tops. We're seeing good Peruvian, too.

Peru has the most authentic and original cuisine in South America. The flavours are. . .

wow!"

Actually, I think the Argentines are just pretending to eat and drink. Most of them are too busy slimming, determined to look good.

This brings us to Argentine fashion, which, despite being six months out of step with the rest of the fashion world, is enjoying a purple patch. Queen of logical-radical chic is Jessica Trosman, 38, an ex-translator. Trosman's 'intellectual', multi-coloured, layered look is discreetly fashionable and doesn't outrage the Argentine needs for classicism and uniformity. Despite showing in Paris and selling at Harvey Nichols, Trosman remains BA-based. Her boutique is in Patio Bullrich mall in Recoleta.

Laura Orcoyen is Argentina's most celebrated and exportable decorator and homewares designer. When we met, she was operating out of a barn-sized store in Uriarte in Palermo. "People cannot believe this is all Argentine, " she says, waving at a vista of tables, white-on-white beds, chairs and icebuckets. According to Orcoyen, there has been a great explosion since the country's financial crisis. "Until three or four years ago, 'Made in Argentina' meant 'take care'.

Now, there is a new pride. It was like waking up one morning and finding everything was different."

Of course, it might not last. You cannot change an ingrained mindset overnight. Five years ago, people were rioting. Now, in Buenos Aires, dog-walking is a growth industry. It's a bubble so big you hardly notice it when you're inside it. Hopefully it'll stay that way.

THE FACTS

Getting there Reaching Buenos Aires is neither quick nor especially easy. The cheapest option is to fly Aer Lingus (www. aerlingus. com) or Iberia (www. iberia. com) to Madrid from Dublin and connect there for Air Madrid (00 34 91 201 6046; www. airmadrid. com), a low-cost airline operating services between Madrid and Buenos Aires. Alternatively Aerolineas Argentinas (0044 207290 7887; www. aerolineas. com. ar) flies from London Gatwick, via Madrid.

Many other airlines also offer connecting services. You could also try the UK-based South American specialist South American Experience (0044 207976 5511; www. southamericanexperience. co. uk) for fares and packages to Buenos Aires.

Staying there Alvear Palace Hotel, Av. Alvear 1891 (00 54 11 4804 7777; www. alvearpalace. com).

B&B from 300.

Faena Hotel + Universe, Martha Salotti 445, Puerto Madero (00 54 11 4010 9000; www. faenahotelanduniverse. com).

Doubles from 185, room only.

Eating & drinking Sucre, Sucre 676, Bajo Belgrano (00 54 11 4782 9082).

Casa Cruz, 1658 Uriarte (00 54 11 4833 1112; www. casa-cruz. com).

Olsen, Gorriti 5870, Palermo Viejo (00 54 11 4776 7677).

Sudestada, Guatemala 5602 (00 54 11 4776 3777).

Rond Point, Av Figueroa Alcorta y Tagle (00 54 11 4802 4379; www. rondpoint-cafe. com).

Tango Bajo Fondo Tango Club (www. bajofondotangoclub. com).

Cristobal Repetto (www. cristobalrepetto. com. ar).

Shopping Gil Antiguedades, Humberto 1degrees 412 San Telmo (00 54 11 4361 5019; www. gilantiguedades. com. ar).

Fahoma, Libertad 1169 (00 54 11 4813 5103).

Jessica Trosman, Patio Bullrich, 750 Avenida del Libertador (00 54 11 4814 7411; www. trosman. com).

Tramando, Rodruigez Pena 1973 (00 51 1 14 481 694 22).

Pablo Ramirez (www. pabloramirez. com. ar).

Laura Orcoyen, Uriarte 1554 (00 54 11 4832 8778; www. laurao. com).