How Does a Country Go Bankrupt?

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Greece is a perfect example where i the greek economy had been cushioned as part of the european union. It was able to borrow very cheaply because it was part of the ureau, and was able to borrow perhaps more cheaply than it would on its own standing. At one pointt that, as you say, effectively it sort of bankrupt it. And so they stop paying their debts, ah, but nobody will lend them new money. Then there's a process of which by which the people you who had lent you money in the past usually take what is referred to as a hair cut in the business. They might not be paid al you know, they might not

Michael Shermer speaks with Nemat Talaat Shafik, Baroness Shafik DBE, known as Minouche Shafik, one of the leading policy experts of our time, about a new and better social contract that recognizes our interdependencies, supports and invests more in each other, and expects more of individuals in return: a rethinking of how we can better support each other to thrive. Shafik avers that no only can every country provide its citizens with the basics to have a decent life and be able to contribute to society, but that we owe each other more than this. A more generous and inclusive society would also share more risks collectively and ask everyone to contribute for as long as they can so that everyone can fulfill their potential.

Shafik is an Egyptian-born British-American economist who served as the Deputy Governor of the Bank of England from August 2014 to February 2017 and has served as the Director of the London School of Economics since September 2017. She served as the Permanent Secretary of the Department for International Development from March 2008 to March 2011, when she went on to serve as the Deputy Managing Director of the IMF — International Monetary Fund.