Would you like to get more information about countries that went bankrupt? It turns out that just like people, countries can go bankrupt too. Of course, the reasons behind their inability to pay the debts is different than the reasons that lead to individual bankruptcy.
Every country has incomes and expenses and that’s why they create annual budgets that should help them get the money they need so their society can work as planned. However, sometimes these expectations are not met. Sometimes, these countries have fewer incomes while in others they are simply spending more than they can afford.
If you are looking for info related to countries that went bankrupt, you will find tons of information online. However, we took some of our time to organize this information and create a list which contains 17 countries that went bankrupt.
- Find out more about the basic characteristics of each of these countries
- Learn more about how they went bankrupt
- Get other useful information about these countries that went bankrupt
In some cases, there were many external factors that led to the bankruptcy of these countries. In other cases, it was completely their fault because the actions of their governments led to bankruptcy. Now let’s check the list of 17 countries that went bankrupt.
1. Greece
Location: Europe
Date: 2015
Currency: Euro
GDP in 2019: 326 billion dollars
Population: 10.7 million
Greece is a European country which was not among the most developed countries in Europe until they’ve joined the European Union in 1981. As a member of the EU, their economy has started strengthening, but that was not enough to avoid bankruptcy in 2015. There were a few things that led to the bankruptcy of this country.
First of all, the Greek economy was affected by the Great Recession. This recession had an impact on a few western countries too, but it was felt the most by Greece and it became one of the rare developed countries that went bankrupt in the last 50 years. In addition to the external factors, there were a few internal factors that contributed to the bankruptcy including poor GDP growth, budget compliance, government debt, and continuous deficits and data credibility.
With the help of European banks, Greece managed to cover part of the debt and get out of bankruptcy after a short period of time. When it comes to the economy of this country which is part of the Eurozone, tourism, agriculture pharmaceuticals are some of the main industries that drive their economy.
- One of the rare European countries that went bankrupt in the last 50 years
- They managed to cover the debt in less than 3 weeks with the help of their European partners
- Greece is part of Eurozone
2. Russia
Location: Europe/Asia
Date: 1918
Currency: Ruble
GDP in 2019: 4.36 trillion dollars
Population: 146 million
Back in 1918, Russia was known as the Russian Soviet Federative Socialist Republic, a predecessor of the Soviet Union. These were hard times for Russia and the rest of republics which part of this socialist state. The wounds of the civil war at home and the effects of World War I have devastated their economy.
After the October Revolution, Russia was forced to go bankrupt because the leader of the newly formed socialist state – Lenin – refused to pay the debts created by the Russian tsars which were expelled to the Western countries after the revolution. So, this is one of the countries that went bankrupt which created a more negative impact on the residents of other countries than to itself.
Since most of the guarantors of Russian debts were located in France, the nationals of this country were the most affected people by this bankruptcy. After the dissolution of the Soviet Union in 1991, Russia agreed to pay these debts. Nowadays, Russia is becoming a big player in the global market which means that it’s possible to recover and re-establish a good position after bankruptcy. One of the most important factors that have contributed to this recovery is the presence of natural resources in Russia.
- Russia was known as the Russian Soviet Federative Socialist Republic in 1918 when the bankruptcy happened
- This is one of the countries that went bankrupt that refused to pay debts to foreign financial institutions.
- The debt was cleared about 70 years later
3. Iceland
Location: Europe
Date: 2008
Currency: Krona
GDP in 2019: 19 billion dollars
Population: 358.000
Before this country went bankrupt, it was known as an economical wonder for a few years. People from all over the world were going to this isolated island located in northwest Europe in order to work there because this country had an excellent standard and quality of life.
However, in 2008, Iceland joined the countries that went bankrupt when three of the most used privately-owned banks in Iceland were forced to stop their operations. As a result of that, Iceland went into political unrest, but things have started going in the right direction in 2011. According to many experts, the main reason why Iceland went bankrupt was the fact that they have given too much power to the private commercial banks back in 2001.
- Iceland is one of the countries that went bankrupt in the 21st century
- The main cause was the poor financial planning of the main banks of this country
- The crisis stopped after three years in 2011
4. Germany
Location: Europe
Date: 1923
Currency: Deutsche Mark
GDP in 2019: 4.5 trillion dollars
Population: 82 million
Germany is one of the leaders of the global economy today. But, it wasn’t always like this. Back in the 1920s, Germany was trying to recover from World War I losses. They had to pay their debts to the victorious sides in this war, but they simply couldn’t find the money.
One bread was worth 200 billion Deutsch marks which is obviously a great sign about the extent of the inflation in this country. In 1923, German people were forced to bring bags with them to the grocery stores in order to put the money they needed to buy food. The value of the Deutsch mark was dropping every minute.
The extreme debts and the consequences of World War I have led to this incredible hyperinflation. This was an unpleasant burden that a few other generations of Germans had to carry with them. Most historians agree that the bankruptcy in 1923 had contributed to the rise of the Nazi ideology and the cult of Adolf Hitler.
- The hyperinflation that you cannot find in another country
- Germany was one of the countries that went bankrupt due to its military loss in the WWI
- One of the causes of World War II
5. Mexico
Location: North America
Date: 1994
Currency: Peso
GDP in 2019: 2.6 trillion dollars
Population: 126.5 million
Let’s be clear, Mexico has never been a financial giant in the region, but they definitely had better times than what the nation has witnessed in 1994. Before we go into details, let us say that today Mexico is facing problems with emigration. Many of their residents are looking for a way to emigrate to the United States, both legally and illegally. Both qualified and unqualified workers are trying to get to the US where they can earn more money.
In 1994, Mexico made it to the list of countries that went bankrupt at least for a short period of time. This debt crisis is known as the Mexican peso crisis. Obviously, this was a currency crisis which came as a result of the fast devaluation of Mexico’s national currency – the peso – against the US dollar.
Capital flight was the main reason behind this problem which threatened to ruin Mexico’s economy. In the background, it was the political instability which made investors boost risk premium on Mexican assets. The US Congress had to pass the Mexican Debt Disclosure Act in order to solve this problem. Of course, the effects of this crisis were felt in Mexico for a long period of time.
- Mexico is a country which has many ups and downs when it comes to the national economy
- This is one of the countries that went bankrupt and were bailed out with the help of the US
- This part of Mexico’s financial history is known as the Peso crisis
6. Denmark
Location: Europe
Date: 1813
Currency: Krone
GDP in 2019: 300 billion dollars
Population: 5.8 million
Denmark is a Nordic country which is present on many lists of countries with the highest quality of living, highest incomes and other lists that can confirm that this country has a strong economy. However, there were times in the past when the Danish economy was struggling. For instance, back in 1813, Denmark became one of the few countries that went bankrupt.
All the countries that went bankrupt back then were affected by the Napoleonic Wars. Denmark has participated in these wars and they had to issue more banknotes than they could afford to issue which made their monetary system quite weak. Even though Denmark was trying to remain neutral, England had its doubts and occupied parts of Denmark which sped up the bankruptcy.
- One of the countries that went bankrupt due to the Napoleonic Wars
- Denmark is one of the most developed countries in the world today
- They wanted to stay neutral in the Napoleonic Wars, but other countries had their doubts about their neutrality
7. Argentina
Location: South America
Date: 2001
Currency: Peso
GDP in 2019: 920 billion dollars
Population: 43.8 million
The 1990s were one of the golden eras of the Argentinian economy. They were basically the leaders of South American countries at this time and their economy was looking very promising. However, the authorities of this country have made a few mistakes that led to one of the worst financial crisis in this country.
In 2001, Argentina owed over 100 billion dollars to domestic and international entities. The unemployment rate has reached 20%. As a result of that, the political situation became very unstable and the country went bankrupt. Some of the reasons why there was a crisis is the fact that the peso was pegged to the US dollar, the public debt was not managed well and the corruption was thriving.
The good thing is that Argentina managed to stabilize its economy and the economy of this country looks good today. We should also mention that the crisis in 2001 was not the first time Argentina faced bankruptcy.
- Argentina went bankrupt in 2001
- Corruption and poor public debt management were some of the reasons that led to bankruptcy
- Today, Argentina has a stable economy
8. Thailand
Location: Asia
Date: 1997
Currency: Baht
GDP in 2019: 1.4 trillion dollars
Population: 68.8 million
Similar to other countries on this list, Thailand was actually doing great before a financial crisis hit this country in Southeast Asia. Before they went bankrupt in 1997, their economy was growing and expanding at an excellent rate in the past ten years. The inflation rate was acceptable too. They have pegged their national currency (the baht) at 25 to the US dollar.
It was the series of speculative attacks that forced the government of Thailand to break the bond between the Baht and the US dollar and allowed the value to be dictated by the currency market. This has caused a domino effect which has hit the economy in a negative way.
Thailand was forced to go bankrupt and ask for help from the International Monetary Fund. The good thing is that it took just four years for the economy of this country to get back on track. They’ve paid their debts before the deadline allowing their economy to grow again.
- Thailand went bankrupt in 1997
- This event led to a financial crisis in a few other Asian countries
- The recovery of the national economy of this country was fast and smooth
9. Barbados
Location: North America
Date: 2018
Currency: Barbadian dollar
GDP in 2019: 7 billion dollars
Population: 277.000
Barbados has become an independent country in 1966. After the initial success in the field of economy in the first two decades, the island nation has started experiencing problems. Just like many other countries in this region, they couldn’t rely only on tourism as an industry that will drive the economy. This country has tried attracting foreign investors by providing good offshore investment opportunities.
In the last 20 years, the economy of this country is experiencing many problems. In 2018, these problems have reached their climax when the government of Barbados informed the citizens that their country went bankrupt. They have revealed that they are defaulting their bonds due to the enormous debt.
They had a debt worth 7.5 billion dollars which is very high when we compare it to their GDP. The authorities are still looking for a permanent solution to this problem, but until then they are taking short-term measures that can help them avoid even more complicated situations for their economy.
- An island nation located in the Caribbean
- Barbados is one of the countries with the worst debt-to-GDP ratio in the world
- They went bankrupt in 2018
10. Venezuela
Location: South America
Date: 2017
Currency: Petro Bolivar Soberano
GDP in 2019: 76 billion dollars
Population: 31.5 million
Venezuela is one of the largest countries in South America. This is also one of the countries that have won their independence at the beginning of the 19th century thanks to leaders like Simon Bolivar. However, in the past couple of decades, Venezuela is experiencing political turmoil at home.
Before we go into details, let us say that the economy of this country relies primarily on the petroleum industry and manufacturing.
This is one of the places which have the richest sources of oil. Yet, for many reasons, Venezuela has been on a brink of a total economic collapse since 2015. One of the reasons for that is the presidency of Hugo Chavez and Nicolas Maduro. These Venezuelan leaders had strong disagreements with the leaders of the Western countries which made many of these countries to impose sanctions. In 2017, Venezuela went bankrupt.
They simply didn’t have enough money to pay their lenders. This was one of the effects of the sanctions imposed by the United States in 2017. Today, Venezuela is on a brink of civil war and the opposition leaders are throwing rallies and protests all the time making it hard for the government to establish control and consolidate the economy of this country.
- The financial crisis started in 2015
- Venezuela went bankrupt in 2017
- Venezuela is one of the biggest oil exporters in the world
11. The United States of America
Location: North America
Date: 1840
Currency: US dollar
GDP in 2019: 20.8 trillion dollars
Population:327 million
The United States of America might be the country with the most powerful economy today, but it wasn’t always like that. There were actually a few times when this country went bankrupt. One of these cases was the country default in 1840. Following the Panic of 1837, an event that has shaken the economy of the US, 19 out of 26 states that were part of the United States went bankrupt in the early 1840s.
What makes this case interesting is the direct cause of this problem. Namely, according to many experts, it was canal building that led to this issue. The country was focused on canal building and this activity required money. The national debt has reached 80 million dollars in just a few years. The infrastructure projects were booming across the states and new banks were looking for capital.
It’s worth mentioning that creditors could not use military assistance to pay these debts because they had to fight states in order to do this. But, it turned out that the investment projects that were taken by these states were worth it. It didn’t take more than a few years for these states to pay their debts. Needless to say, these projects contributed to the development of the United States in general.
- More than half of the US states at that time went bankrupt
- They were investing in infrastructure projects more than they could afford
- The debts were paid off after a short period of time
12. Newfoundland
Location: North America
Date: 1933
Currency: Canadian dollar
GDP in 2019: 1.9 trillion dollars (Canada)
Population: 37.3 million (Canada)
Did you know that Newfoundland was once a sovereign state? It was part of the British Dominion, but the territory was self-governing. This means that the local authorities had the freedom to pass laws and bills and to manage their economy in any way they want. However, it turns out that they didn’t know how to run the economy in the right way.
Starting from the late 19th century, the authorities have invested a lot in railway construction. They have also created their own regiment which was part of the First World War. All these things made sense at the time, but they also cost a lot of money. The debts have started mounting and the British government has created a special Royal Commission focused on Newfoundland’s economy.
As a result of that, they have lost their self-governing status. Newfoundland was managed by a commissioner appointed by the UK. In 1949, Newfoundland became part of Canada, it’s the tenth province to be more precise.
- Newfoundland was a self-governing region at the beginning of the 20th century
- It later becomes part of the UK with no self-governing privileges
- The huge investment in infrastructural projects led to bankruptcy
13. Belize
Location: North America
Date: 2012
Currency: Belizean dollar
GDP in 2019: 3.3 billion dollars
Population: 398.000
Belize is a small independent country located in Central America. It has a population of just 388.000. Belize, like other countries in this region, has a private enterprise economy which is focused on agriculture and merchandising. Tourism and construction are two of the most important industries here. For many years, Belize was known as a tax haven where thousands of international offshore companies are registered.
However, this small country has struggled with its economy for many years. Poor tax collection, lack of basic natural resources and other factors contributed to the growing debt of this country. Back in 2012, Belize missed 23 million interest payment.
This amount of money might seem like a small debt for many people, but it was enough to hurt Belize’s economy and force the government to declare bankruptcy at least for a short period of time. With debt restructuring and negotiations with debt collectors, this country managed to end this financial crisis.
- Belize is located in Central America
- It went bankrupt in 2012
- This country is known as a tax haven
14. Zimbabwe
Location: Africa
Date: 2007
Currency: RTGS dollar and US dollar
GDP in 2019: 41billion dollars
Population: 16.1 million
Zimbabwe was one of the few countries in Africa that were still not independent in the late 1970s. They gained their independence in 1980. In the first years of their independence, the country has witnessed excellent growth and strengthening of the economy.
However, starting from 1991, Robert Mugabe, the president of Zimbabwe has introduced an Economic Structural Adjustment Programme which had a negative impact on the economy of this African country. This program was targeting British farmers and this led to problems with the international community. The direct result of that was famine, decreased life expectancy, and continuous financial crisis.
In 2007, Zimbabwe went bankrupt and the world has witnessed another hyperinflation. According to some statistics, inflation reached an incredible 89.7 sextillion percent in 2008. The government was forced to drop their currency which was replaced with fiat currencies of other nations primarily US dollars. This currency change has helped Zimbabwe to get out of the risk zone, but the economic instability of this country is still in place. It will take serious reforms and better budgeting in order to resolve this situation.
- Zimbabwe became an independent country in 1980
- The financial crisis in this country started in 1991 and culminated in 2007
- Zimbabwe uses the US dollar as official currency
15. The United Kingdom
Location: Europe
Date: 1976
Currency: Pound sterling
GDP in 2019: 3 trillion dollars
Population: 66.9 million
The United Kingdom is currently stuck in the Brexit process which should help this country leave the European Union. It turned out that the people of this country were interested in managing their funds in their own way. Historically, they have a good record when it comes to this activity and the UK has always had a strong economy.
However, there were times when things were not going as planned and the UK had to look for radical solutions. We are not sure whether we can say that the United Kingdom went bankrupt in 1976, but this was a year when the British needed international help to support economic stability in their country.
So, in 1976, the British government had to borrow around 4 billion dollars from the IMF (International Monetary Fund). This was the highest loan that was requested until then. After getting around 50% of the loan and making serious budget cuts, the government was able to stabilize the economy of the country. The loan was later repaid, but for a few years, the UK had to follow the instructions provided by the IMF.
- The United Kingdom was facing a serious financial crisis in 1976
- The IMF helped the UK avoid complete bankruptcy
- This was one of the highest loans of all time approved by the IMF
16. Bolivia
Location: South America
Date: 1984
Currency: Boliviano
GDP in 2019: 95 billion dollars
Population: 11.4 million
Bolivia is one of the two landlocked countries located in South America. This country has been independent for over 150 years now and just like the rest of the countries in this region, it had its ups and downs. The same goes for the economy of this country.
The best period for the Bolivian economy was between 1960 and 1977. A fee of the most important sectors of the national economy of this country was growing fast like the agricultural sector and the mining industry. However, things started going wrong after that. It was the fixed exchange rate policy which was followed without any modifications for many years and the continuous deficits that resulted in a debt crisis which started in 1978 and culminated in 1984 when the entire continent witnessed a financial crisis.
All the hard work in the field of the economy was lost in just a few years. Bolivia went bankrupt in 1984 when the inflation rate reached over 20.000%. The good thing is that the government has introduced radical measures in the monetary sector and the fiscal sector which stabilized the inflation rate and economy in general. It’s good to know that Bolivia had a financial crisis at the beginning of the 2010s too.
- Bolivia is a country with an economy that primarily relies on agriculture and mining
- They went bankrupt in 1984
- The main import and export partner of Bolivia is Brazil
17. Yugoslavia
Location: Europe
Date: 1982
Currency: Dinar
GDP in 2019: –
Population: 22.5 million (in 1981)
This is an example of a country that went bankrupt which no longer exists. Yugoslavia was a socialist state which existed in Southeast Europe between 1945 and 1992. Six independent states were created as a result of the disintegration of this country.
In 1982, Yugoslavia went bankrupt, but the socialist regime managed to hide this fact. So, this might not have been a de jure bankruptcy, but it was definitely a de facto bankruptcy. In this year, Yugoslavia failed to find funds to take care of foreign loans. The consequences for the economy of this country were felt everywhere – limits on funds that you can transport across the border, lack of foreign goods and an agreement with the IMF about loans and financial support. The debt was reallocated to the republics which part of the federative state. These debts were being paid for many years after the disintegration of the country.
- Yugoslavia is a former country which was located in Southeast Europe
- It included six republics which later became independent countries
- This county went bankrupt in 1982
