minister. He promised to renegotiate with the EU for further

bailouts, in an attempt to stabilize the economy and lessen the debt burden on the Greece’s

population. If he does not succeed there is a real chance that Greece could be on the

brink of

bankruptcy again. So, what happens when countries go bankrupt?

First of all, a country going bankrupt is much different from a corporation or a person

going

bankrupt. If a corporation or a person declares bankruptcy, there are laws in place which

help

both the defaulter and the creditor recoup losses. But if an entire nation take a nosedive

into

bankruptcy, it’s sometimes a free-for-all. Historically, creditor nations were known

to seize

assets by force, or blockade a country’s ports until debt payments resumed. Even in

2012,

an Argentinian navy vessel was impounded in a port in Ghana because of disputes over

Argentina’s sovereign debt. However, usually nowadays, long and complicated court battles

are

the norm. And in all cases, the outcomes are very unpredictable.

Many countries have been almost or completely bankrupt in recent history -- countries like

Greece, Ireland, Portugal, Pakistan, Spain, Argentina and Iceland. Although there are

many

unique circumstances that lead some countries to debt-crises, a weak government structure

and

out-of-control spending is typical.

That’s what happened to Argentina in the late 20th century. The government announced

in

2001 that it could not pay its foreign debt, and there was a cash flight from the banks

as people

withdrew their savings. Protesters took to the streets as money problems grew, and a

mob

forced the Argentinian president to flee in a helicopter. Later, in 2003, the country

stabilized

itself by addressing the currency exchange rate problems, encouraging economic growth,

and

negotiating foreign debt. There are tons of factors that led to their recovery, but focusing

in on

spending and getting help from the international community was paramount.

The financial crisis in Iceland was different. In 2008, the main Icelandic banks failed,

and the

government refused to bail them out. This kept the government from over extending and

risking

bankruptcy, but it also endangered the financial situation of their citizens. To correct this,

policy

makers took bailouts from the International Monetary Fund, which allowed them to build

and

protect social support programs and forgive homeowner debt. Currently, Iceland is well

on its

way to recovery with a low unemployment rate and growing economy.

As history shows there are many ways that countries have corrected bad financial situations.

We can’t say how Greece will move forward in the crises, but we can say that there are

options

and solutions to be found.

To find out more about the EU, the International Monetary Fund and many other major

international organizations check out our video on the International Alphabet soup of

acronyms

that are out there.