Correa just gave notice they wouldn't make the interest payment on the basis the debt is immoral. http://seekingalpha.com/article/106615-ecuador-approaches-default http://news.bbc.co.uk/1/hi/business/the_economy/435667.stm
If you rip off a lender as a citizen, you are a subprime lying scum. if you do it as a country, its 'public policy'
The difference is that the defaulting citizen is the same person who took out the loan. A defaulting government is not a person, and is often not even made up of the same people who took out the loan. So the moral obligation is basically zero.
An excellent basis for the any govt and almost any worldwide corporation to legitimize defaulting on debt and obligations. (Actually GM should've 'defaulted' on the unions a long time ago as the basis of past claims were made by immoral agreements of previously management). Credit and trustworthiness out the window. Buying any latin american debt is and always has been a game of roulette. There's no trust in these systems on fundamental levels. This should be a lesson to us more developed countries.
The moral obligation exists. If you want that your descendants can get cheap credit you can't default. Correa could pay, he has the money but instead he prefers to maximize the near-term utility.
http://www.abc.net.au/news/stories/2008/12/13/2445704.htm I don't get it. Correa is willing to piss off plenty of people (and lots of $$$) for a measly $31 million interest payment? Doesn't make any sense to me.
I haven't looked at the state of ecuador finances, but is it fair to assume they are very very dependent on oil price? I imagine they are underwater on their budget, and there is a lot more to default on coming up.
a society(and correa) has to consider wrong to default on obligations take by previous administrations or previous CEOs otherwise that would bring down the core of the legal system The primary beneficiary(and the name on which the debt is held)is of the loan proceeds were the people of Ecuador, not their president. they owe the money to the investors even if their representative keeps changing the primary beneficiary of a corporate loan is the corporation, that corporation owes the money even if the ceos made a silly mistake and then steps down Branches of government are treated as legal entites that can be sued by the law afterall