As the confrontation between Greece’s newly elected government and the European Union escalates, the country could run out of cash as early as this March. Earlier, on January 25, 2015, Greece’s radical left party, Syriza, became the first anti-bailout party to win elections in the Euro zone. Consequently, Prime Minister Alexis Tsipras is now refusing to accept more bailout packages, and rather demands the restructuring of outstanding debt. A request, which is openly rejected by Germany, the European Central Bank and the European Parliament. Depending on the undergoing negotiations between the sides, Greece could be left to deal with bankruptcy on its own. This is an attempt to understand what leads to a country’s default, and what happens afterwards.
Case studies of prior defaults in Argentina, Iceland and elsewhere in the world reveal some very interesting facts about the economy of a country, which is on the verge of bankruptcy. … Read More