# Is there a practical difference between Greek default and their debt being forgiven?

**URL:** <https://boards.straightdope.com/t/is-there-a-practical-difference-between-greek-default-and-their-debt-being-forgiven/731122>\
**Category:** Factual Questions\
**Created:** [September 13, 2015, 7:12pm UTC](https://boards.straightdope.com/t/is-there-a-practical-difference-between-greek-default-and-their-debt-being-forgiven/731122 "2015-09-13T19:12:44Z")\
**Posts on this page:** 2\
**Page:** 1

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**Author:** ![sweeteviljesus](https://avatars.discourse-cdn.com/v4/letter/s/898d66/32.png) [@sweeteviljesus](https://boards.straightdope.com/u/sweeteviljesus)\
**Post date:** [September 13, 2015, 7:12pm UTC](https://boards.straightdope.com/t/is-there-a-practical-difference-between-greek-default-and-their-debt-being-forgiven/731122/1 "2015-09-13T19:12:44Z")

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In both cases, investors don’t get there money and Greece will have to borrow at much higher rates.

Thanks,  
Rob

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**Author:** ![Measure\_for\_Measure](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/measure_for_measure/32/557_2.png) [@Measure\_for\_Measure](https://boards.straightdope.com/u/Measure_for_Measure)\
**Post date:** [September 13, 2015, 7:16pm UTC](https://boards.straightdope.com/t/is-there-a-practical-difference-between-greek-default-and-their-debt-being-forgiven/731122/2 "2015-09-13T19:16:41Z")

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Is there a difference between a negotiated default and unilateral action? Yeah, there is. I suspect the bond markets distinguish between the two in some way, though I admittedly have no evidence of that.

Specifically, I’m speculating that debt forgiveness would result in a shorter and less intense penalty phase by the bond market. If forgiveness is paired with an IMF program, while unilateral default is not, that would definitely make a difference. Lenders follow the IMF’s lead.