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Oh, and by the way, when Bini Smaghi says:
Many commentators fail to realise that the main impact of a country's default is not on foreign creditors, but on its own citizens, especially the most vulnerable ones. They would suffer the consequences most in terms of the value of their financial and real assets.
A government telling its providers to "go to the courts if you want to get paid" is basically a default. Since Spain (or its regional or local governments) are not defaulting on their bonds, this is a selective sovereign default.
A sovereign nation enters "selective default" when it elects to delay repayment of some of its financial obligations while fully honoring others.

The idea is that eventually everyone gets paid somehow. It's just in a manner different than how it's set up now.

Austerity rules.


Economics is politics by other means
by Migeru (migeru at eurotrib dot com) on Mon Aug 29th, 2011 at 06:41:05 AM EST
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