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Debt Default

A debt default occurs when a borrower is unable to repay their debt as it comes due. This can happen for a variety of reasons, such as a decline in the borrower's financial condition or a change in interest rates that makes it difficult for the borrower to meet their debt service obligations.

Examples of countries that have defaulted on their debt include:

  • Greece, in 2010, due to high levels of debt and a struggling economy.
  • Argentina, in 2001, due to a combination of economic mismanagement and the impact of global economic conditions.
  • Venezuela, in 2017, due to economic mismanagement and the fall in oil prices, which resulted in a shortage of foreign currency.
  • Zimbabwe, in 2008, due to hyperinflation and economic collapse.

It is worth noting that defaulting on debt can have significant negative consequences for a country, including difficulty in accessing international credit markets and a decrease in foreign investment.

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