Bankruptcy and Governments
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We’ve often heard of individuals and businesses going insolvent. But even governments can declare bankruptcy . However, this is very rarely done as this would have extremely deleterious effects on investments and investor confidence in a country. In past eras, it had been done quite often. Spain was the first ever country to declare bankruptcy, suspected by many as a means for Philip II of Spain to escape from the credit responsibilities owed to bankers all over Europe. Today, it still remains an option, though not something that is ever thought palatable in the least.