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All lending to a sovereign is inherently unsecured. When you lend money to someone you demand to be paid interest because there is a risk you won't get repaid.
by djloche 11y ago
All lending to a sovereign is inherently unsecured. When you lend money to someone you demand to be paid interest because there is a risk you won't get repaid. Based on the risk of not being repaid, you charge an appropriate interest rate. What you propose only ends in war.
- anovikov 11y agoThis is why i think a country should not lend the money to a country a war with which it can't reasonably expect to win so easily that no war is possible: it will yield to demands. Demanding interest: it worked when Greece was selling their debt on the free market. I have no problem with that, whoever buys their bonds accepts the risks, and the rate is market driven, caveat emptor rule applies. But right now we are speaking of money given essentially for free, on conditions much more favorable than any market rate Greece can expect to get (this is why they are asking for money, otherwise they will just offer more bonds). So you are not right here: money given on below-market conditions may, and should, require ways to collect it back.