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[–] yankee_rebel 0 points 1 point (+1|-0) ago 

I sovereign can't ever really declare bankruptcy, they can default on payments which has a similar effect credit wise but the debts still exist and to re-enter foreign markets/obtain future credit they'll need to re-negotiate with other nations who hold the notes not to enforce them. If Greece tomorrow says were refusing to make payments on outstanding debts, Germany, France, Japan and all those that lent money can still nope you still owe us and refuse to lend/impose sanctions until they feel they've been satisfactory repaid and Greece can't do a thing about it other than continue to say were not paying it.

While default should generally be avoided history has shown it does provide wake-up calls to nations. Is default right for Greece only time will tell, but if they do go the route of default there is going to be a lot of economic hardship in the near future without any major source of exports.