Re:Maybe Greece Should Go Bankrupt
by _delirium on Thursday February 11, 2010 @01:40PM
(#1118362)
It just means they default on the loans. The creditors only get what the country chooses to give them (if anything), which is usually negotiated with some eye towards balancing the country's interests against the harm to their future ability to get loans if they screw the creditors too much. See: http://en.wikipedia.org/wiki/Default_(finance)#Sovereign_def...
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But bankrupt means you don't run the company/country anymore - they call in the receivers, and KPMG or whoever sell off the assets for scrap.
Yeah, from that definition of bankruptcy it's a poor choice of words, because sovereign countries can't go bankrupt in the sense that bankruptcy law means. They're colloquially bankrupt in the sense of "not able to pay their bills", but not legally in the sense of "in court-supervised receivership"--- because there is no world government, and therefore no bankruptcy court with jurisdiction.
Interesting idea though for a small country like Tuvavlu - just sell the country to the highest bidder. If say an online gambling company wants to be sure of favorable treatment it could just buy the government wholesale instead of having to buy it one politician at a time.
It's only what say Lichtenstein, the channel islands, Bermuda have de-facto done.