Sovereign Debt and Default
Jonathan Freedland explores a moment in history which illuminates a current debate. The agony of Greece's journey towards default holds Europe & the markets in thrall. If not now, when? The Long View takes a giant leap backwards some 670 years to explore another moment of financial crisis. There is unrest at home and Europe is in turmoil. Only this time it is 1340. Welcome to sovereign debt and default, medieval style. The King, Edward III, is in the counting house, counting out the money and there isn't enough. He has narrowly avoided being a prisoner of debt on the continent, his expensive foreign alliance has hit the buffers and his grand plans for the crown of France must wait. His coming default will help bring down the banks, in this case the Florentine houses of Perruzzi and Bardi. The 'haircut' then is severe. Jail and ruin for some and little chance of recovering losses for their creditors. Historians Adrian Bell and James Macdonald, the writer Maria Margaronis and Newsnight's Economics editor Paul Mason discuss the then and now of sovereign debt and default.