When it comes to keeping a healthy balance sheet, the countries with the largest debt in the world seem to be doing just about everything wrong. Yet despite the fact that most people would agree with this statement, the countries in question do not seem very concerned about their financial situations. The reason for this can be reduced to a very simple factor: countries cannot be forced to pay their debt. Of course there are always consequences for not meeting debt obligations, yet these are far more drastic for businesses and households than for sovereign states.
In addition to being able to resist prosecution and seizure of wealth, governments can raise additional funds by increasing taxes. Businesses on the other hand must find a way to boost sales, meaning they have no reliable source of income in case of an emergency. Thus, if the countries with the largest debt are ever on the verge of failing to pay, they can always resort to their citizens for help. Hence, states are not only far more protected from their creditors than businesses, but they also have very unique tools at their disposal.
So what leads these nations to take on such debt burdens in the first place? Well considering most states try to implement as many policies as possible, it comes as no surprise that cash is usually scarce. Hence, it is not only difficult, but also unwise, to finance large infrastructure projects without incurring debt. Thus, the ten countries with the largest debt are not necessarily irresponsible, but actually quite smart when it comes to doing business.
Although it seems these nations could certainly benefit from reading some of the best finance blogs, which we listed in a previous article, their economic progress suggests otherwise. Contrary to popular belief, indebtedness and poverty are not linked, meaning advanced economies can and do form part of the list of the countries with the largest external debt. If you are curious to know more about the nations in question, then the following list will provide some very helpful answers.
10. Spain – $2.3 trillion
It is no secret that Spain has been dealing with a very complex economic situation over the past few years. As it was one of the countries most affected by the financial crisis of 2008, extracting additional funds from the population has proven difficult.
As much money as $2.3 trillion is, of countries with the largest debt, Spain is in trillions of dollars-worth of better shape than some of the upcoming countries. Check them out on the next pages.