This is what happens when countries default on their debts

So 2015 looks set to be a difficult year for countries struggling under heavy debt burdens. Only two months in and we have already seen precarious economic situations in states, including Greece and Ukraine, worsen substantially. Few would bet against the likelihood of a major debt restructuring in the near future.
But have we become too afraid of the word lenders hate to hear — "default?"
Here are the key points:

• The 1980s oil price shock caused widespread defaults in South America, hitting banks hard and freezing affected countries out of international credit markets
• Europe's crisis 2010-present saw default risk transferred from banks to taxpayers
• The lessons of history are that support for troubled economies is important, but so too is the ability to restructure debt

Well, the first thing to note is that we are coming out of a period of historically low levels of sovereign defaults. Since the Second World War the percentage of all states in default on their debts, as indicated by defaults on foreign currency bonds, has fallen sharply.

 

 http://uk.businessinsider.com/a-history-of-sovereign-debt-defaults-2015-3#ixzz3Tc0OKRn1