Practice Good Theory

Lenders to governments run two types of risks: credit risk (the country won't pay back 100% of the loan), and currency risk (a country borrowing in its own currency can pay back the loan by "printing money"). Developing countries often borrow loans denominated in a currency like the US $, to remove currency-risk. Despite this, they have to pay higher rates of interest because they are not great credit risks. Countries have defaulted throughout history. Yet, consider the chart on the left. After European countries joined the Euro, interest rates on their borrowing became almost equal. And, notice how that finally ended around 2008, with the "great recession". Why were rates nearly equal for about 9 years? Under the Euro, countries agreed not to default (default was not envisaged).  They also agreed to stick to certain deficit limits  Finally, there was a good possibility that the EU and the ECB would come to the aid of any country in trouble, bail

The Mediterranean Maghreb , along with Egypt and the Levant , has been rocked by the "Arab Spring". Once part of the Roman Empire , North Africa went through a period of Islamic rule, Turkish Imperialism, and European colonialism, followed by independence under mostly dictatorial regimes. The Arab spring marks a new turning point. " A moment comes, which comes but rarely in history, when we step out from the old to the new; when an age ends; and when the soul of a nation long suppressed finds utterance ." - Nehru What will "the new" look like in North Africa? Some fear the next phase will be Iranian-style Islamic rule, others are cheering for Democracy. Probably, the next phase will vary across the four countries of the region, ranging between strong authoritarian (possibly Islamic) rule and more liberal democracies that implement a few Islamic rules in family-law and related areas. Later, with a generation or two, that too  may pass. I think it is