New forms of debt restructuring reward bad behaviour

Negotiations over international debt are often headspinning. To reduce the debts of a country that can’t pay the bills, it takes referees from the imf, teams of lawyers and a contest between a country and its creditors. Everyone wants a deal, but no one is keen on taking losses. Just as creditors agree on who should club together, they start arguing about the terms. The chaos can go on endlessly. Countries, unlike bankrupt companies, are never liquidated. “It was a zig-zag, sideways, forwards, backwards, down, up, but we kept our eyes on the ball,” reported Haikande Hichilema, Zambia’s president, after his country finally managed to strike a deal.