During 1898 US annexed Cuba from Spanish along with their huge debt that the US had no intention to pay. US called it Odious debt and did not repay.
The same thing happen in Mexico a decade earlier when Republican ousted Emperor Maximilian I. Later he was killed in firing squad.
Again US pulled the same stunt with Iraqi debt calling as Saddam’s debt and did not return to its lenders France and Russia after US secured its occupation on her. So, Iraqi people did not repay the debt as it was declared ‘Odious’.
Later Ecuador (could have been the richest in S America), fell into vicious circle of debt. Government Took huge debt from World bank and lent to companies like Halliburton, where public would be responsible to repay the debt through national fiscal system. The then president resigned instead of succumbing to the WB’s pressure and meddling with nation’s fiscal policies. Correa became a hero and got re-elated. First thing he did was got rid of WB and IMF’s representatives. These representatives ended up in Greece.
Like we see Manmohan Singh a World Bank employee worked as agent appointed as unelected FM of India and later was made PM of India. Indian Congress got the man won a sit not from Punjab (as far as I remember) but from down south.
During 2010 it was revealed that a former employee of Goldman Sacs was assigned as leader of Greek Public Debt management Agency. Exactly like ex Goldman chief Henry Paulson took the job as US Treasury secretary. Greece’s arms import from Germany, France went up yet contribution in pension fund and social welfare went down.
In 1927 Professor Alexander Sack taught ‘Odious debt’ both in the US and in Europe. This debt is comprising of:
1) Govt take loan without approval or knowledge of her people.
2) Loan is spent on things not needed for people
3) The lender knowingly terns blind eye.
In Greece hugely indebted private corporations were nationalized with international loan. Now the taxpayers are hold for repayment!!
I think people will rise like Tunisia and Egypt. Greece will inevitably default on its loan by declaring it ‘Odious’ as US did several times. Greece will exit, which will bring the union to a brink. And what effect this even shall have on world economy, remains to be seen.