Returning country loans with bonds

[ShibaWow]

Let's take 1 small country for example, let's say Croatia

Croatia is in debt around 46 billion € (outter debt)

Croatia has around 4,5 million residents (+ 2-4 million in diaspora, + around 500 000 in Bosnia&Herzegovina)

would such a small country be able to sell enough bonds to pay off it's debt?

And as the country pays the debt to the banks off with the bonds, it lowers its interest rate and transfers it's outter debt to an inner one
now giving profit to it's own residents instead of foreign banks therefore increasing purchasing power and living capabilites of the individuals + gaining more money trough taxes as the residents profit

Do you think this is a valid theory and could such a small country gather enough home investors for this kind of bonds?

[Balthazar]

Replacing one debt with another is a ponzi scheme.

It's better to decrease some taxes instead, and you'll get more money to cover your debt.

[ShibaWow]

Replacing one debt with another is a ponzi scheme.

you don't understand

how is it a ponzi?

that way you have to pay a higher interest to make a bank rich


this way you lose less money by paying a lower interest rate and you make your people richer

it's damage control

I'm just wondering if it's doable

It's better to decrease some taxes instead, and you'll get more money to cover your debt.

how do you get more money by decreaseing taxes? o.O

if you meant increase
taxes in Croatia are already at 25%, that's the 2nd largest in the world

and for a nation of 4.5million covering a 45 billion€ debt with taxes I don't think it's doable
and the debt keeps growing every year

[Balthazar]

how do you get more money by decreaseing taxes? o.O

It's simple... Decreased taxes will cause a shrinking of the informal sector. Also it will make the economy more attractive to foreign investors.

how is it a ponzi?

It's a ponzi because it replaces a debt with another. And it will crash if people would decide to sell their bonds.

that way you have to pay a higher interest to make a bank rich


this way you lose less money by paying a lower interest rate and you make your people richer

Maybe, but having the domestic debt is far worse than equal foreign debt. That's why state usually uses the foreign loans to cover domestic debt.

[bryant.coleman]

Croatia is an European Union member state. They can easily benefit from it. Look at Latvia. They are selling the Latvian passports, for $96,000 apiece. Why can't Croatia do the same? Tens of thousands of people in China and Hong Kong (and may be in Russia and Iran as well) are willing to pay as much as $500,000 to get EU citizenship. Sell some 10,000 passports, and you'll be able to collect $5 billion.

[ShibaWow]

It's a ponzi because it replaces a debt with another. And it will crash if people would decide to sell their bonds.
[/quote]

but that's exactly what they're doing now with foreign loans

better to make their own people wealthy then a bank :/

Croatia is an European Union member state. They can easily benefit from it. Look at Latvia. They are selling the Latvian passports, for $96,000 apiece. Why can't Croatia do the same? Tens of thousands of people in China and Hong Kong (and may be in Russia and Iran as well) are willing to pay as much as $500,000 to get EU citizenship. Sell some 10,000 passports, and you'll be able to collect $5 billion.

:O

how is the international community reacting to this? o.O

seems very wrong