"...As demonstrated in my recent book with Carmen Reinhart This Time is Different: Eight Centuries of Financial Folly , Greece has been in default roughly one out of every two years since it first gained independence in the nineteenth century. Loss of credibility, if it comes, can bite hard and fast. Indeed, the historical evidence slams you over the head with the fact that, whereas government debt can drift upward inexorably for years, the end usually comes quite suddenly.
And it can happen to any country, although advanced countries can usually tighten fiscal policy with sufficient speed and credibility that the pain comes mainly in slower growth. Unfortunately, for emerging markets, adjustment is often impossible without help from the outside. That is the precipice on which Greece stands today...
...One of the more striking regularities that Reinhart and I found is that after a wave of international banking crises, a wave of sovereign defaults and restructurings often follows within a few years.
This correlation is hardly surprising, given the massive build-up in public debts that countries typically experience after a banking crisis. We have certainly seen that this time, with crisis countries’ debt already having risen by more than 75% since 2007..."
at http://www.project-syndicate.org/commentary/rogoff65/English
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