Sovereign debt problem : defaults and restructuring

Abstract

This thesis reviews the history and causes of sovereign defaults and analyses the problem of developing countries' debt. It will discuss why the unsustainable debt of developing countries was issued and consider the two most common solutions to debt-service difficulties, namely, debt restructuring and debt forgiveness. During different periods in history, the issue of sovereign debts has engendered military conflicts, induced serious domestic reforms and sometimes even changed political regimes. The thesis is based on the publications by the field leading economists, sucj as Rogoff. Sachs. Krugman. Cohen, Eichengreen and some others, and refers to the most recent statistical data provided by the IMF, the World Bank and the Paris Club of Creditors.