eli5 Why it’s bad for country to default on it’s debt?
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When countries borrow money, the amount they have to pay back on top of what they have borrowed (called interest) is determined by a lot of things.
One of the main things is how likely it is that they’re going to be able to pay the money back. If a country defaults on their debt, they will likely find much fewer people will want to lend them money at all, and those who do will demand very high interest rates.
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