A few days ago, I was speaking to a friend of mine who had decided to go back in economic history and do some research on defaults. Turns out, Greece was the very first country to default on its debt since 377BC. Moreover, since its independence in 1829, Greece has spent around half its time in default on its sovereign debt.
The UK technically hasn’t defaulted since independence in 1066, France hasn’t defaulted since 1812, but guess which country has defaulted the MOST times … the answer is Spain. Spain defaulted on its debt six times in the eighteenth century, and seven times in the nineteenth century. It escaped unscathed from the twentieth century, and (still) hasn’t defaulted in the twenty-first century.
Next week should be interesting. In the aftermath of Fitch and Moody’s having downgraded Spain’s credit ratings, Mexico will host a summit of G20 leaders June 18 and June 19 which will be dominated by the euro zone debt crisis. It is widely expected that Spain will tell us more about how it plans to use the up to 100 billion euros ($125 billion) that euro zone finance ministers agreed to lend Spain to shore up its banks.
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