he Greek government made a similar argument during negotiations over its financial rescue plan. However, European countries, led by Germany, have called for continued spending cuts and reforms.
Greece reached a deal so that the country will stay in the Eurozone, the group of nations that use the euro as their currency. But for developing nations, Tim Jones says, there is additional risk when a nation’s currency loses value compared to other currencies because of high debt.
“The debts are all owed in foreign currencies, like the dollar or the euro. And so when a country has a currency devaluation, then the debt payments shoot up.”
So as debt grows, so do the risks.
Debt campaigners are calling for tighter controls of international lending and cancelling some loans for countries already in crisis.
I’m Mario Ritter.