“Rescates económicos como el de Grecia o Islandia exigen una reflexión sobre los peligros de un exceso de endeudamiento”
"Economic bailouts such as Greece's or Iceland's call for reflection on the dangers of over-indebtedness."
A doctor from the University of Navarra explains in her thesis how foreign debt, a phenomenon that is not new, is core topic in a crisis such as the current one.
"Countries such as Iceland or Greece, which were not habitual debtors of regional and international financial institutions, have had to resort to international financing to face their internal economic difficulties. thesis This calls for a reflection on the dangers of over-indebtedness," explained Rosana Garciandía, who defended her doctoral dissertation at the University of Navarra's Law School School .
B In the work, graduate "The current international regulation of external debt: the importance of International Public Law and international economic institutions in the international indebtedness of States", he shows how the way of conceiving international indebtedness and its regulation have evolved in recent decades, especially in the wake of the external debt crisis of the 1980s.
"A few years ago, the expression 'external debt' made us think of countries at development that, having borrowed abroad, were unable to repay their loans," said Garciandía. "That is certainly part of the reality of international indebtedness, but the recent financial crisis has shown that industrialized countries can also be affected by an external debt crisis, having over-indebted themselves," he added.
Strategies to avoid debt crisis
In the midst of this situation, the positive fact is that these events have provided some interesting lessons that we can learn from at this time. "The dangers of over-indebtedness are now well known, and there are levels above which it is not advisable to go into debt. In this sense, the trend is towards a sustainable debt, which takes into account the debtor's capacity to pay, its internal economic circumstances and the country's status in terms of the population's welfare".
Moreover, it is known that the structure of public debt can avoid some of these dangers, if one tries to avoid short-term debt deadline and debt denominated in domestic currency. Finally, a good debt management is nowadays considered essential, which implies, among other things, "a high level of transparency, a clear institutional framework , a well-defined debt strategy and good risk forecasting".
At final, she concluded, "it is time to take into account all these tools, to prevent the current crisis from turning into an external debt crisis like those that have occurred in the past".
Interview with Rosana Garciandía on 98.3 Radio:
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