debt crisis

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Inability or unwillingness of major debtors to service their debts, or serious fears of this. A debt crisis occurs if major debtors are unable or unwilling to pay the interest and redemption payments due on their debts, or if creditors are not confident that these payments will be made. This is most likely to happen when debts are large, and interest rates rise or the economy slumps.

Subjects: Politics — Economics.

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