Finance
Sovereign Debt Crisis
Definition
When a government cannot service or refinance its debt, potentially leading to default, bailout, or severe austerity — causing economic and social crisis.
Explanation
Major crises: Latin American debt crisis (1980s), Asian financial crisis (1997), Argentine default (2001), European sovereign debt crisis (2010-2015, Greece/Ireland/Portugal), Sri Lanka (2022). Crises typically involve currency collapse, IMF intervention, and painful austerity. Warning signs: rising debt-to-GDP, widening spreads, current account deterioration, reserve depletion.