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The government of Argentina voluntarily took the position that they would not settle with the outstanding debt holders. They could have settled 15 years ago an

• Alupis 10y ago
  Doing so would not have made the situation much better. To an outside investor, Argentina is a lot more risky now that they've proven they're willing to default when things get rough. That kind of risk isn't impossible to overcome, but it's very expensive. For a struggling nation without a strong economy, foreign investments can be lifeblood.
  • roymurdock 10y ago
    Or a noose. Debt is a double-edged sword - it all depends on if it's structured in a reasonable fashion, and if it used in a productive manner that can pay down promised future payments.
    • Alupis 10y ago
      > it all depends on if it's structured in a reasonable fashion And the ability to structure reasonable debt is contingent on perceived risk to outside investors. If Venezuela defaults and becomes very high risk, it's unlikely future debts will be favorable towards Venezuela, impacting Venezuela's ability to climb out of the hole, so-to-speak.
      • ptaipale 10y ago
        Markets tend to think ahead of that. At least I think Venezuelan debt is already now very high risk; after a default, I would not necessarily think it were higher - I would look at the policies adopted by the government and think whether they are consistent and responsible. In other words, with the current government, it doesn't really matter whether they default or not. They are not very believable in any case.