by Thad A. Titze
The Parthenon from the south. Credit: Wiki Commons.Following the Peloponnesian War, Athens’ interim government borrowed 100 talents ($37 million) from the victorious Spartans. Shortly thereafter, when Athens’ democratic government returned to power, it assumed the debt incurred by the interim government and repaid the Spartans in full. This story is noteworthy as it marks one of the first discernable instances of sovereign debt. The Athenians’ timely repayment, however, is anomalous in the long history of public borrowing. Default and renegotiation of public debt is a practice nearly as old and constant as public debt itself. As the spotlight of sovereign debt returns to the Greek people -- pioneers of public debt -- it is important to recognize that throughout history governments have rarely been careful stewards of borrowed money.
