Here's How to Default on Sovereign Debt

ITHACA – The financial brinkmanship over Greece’s debts has raised the question of whether (or when) the country will default. To be sure, it would be far better for Greece and its creditors to reach a negotiated solution. But that outcome is far from guaranteed. The Greek government barely managed to make a significant payment last month, and even larger payments fall due throughout the summer, starting in June with an installment of more than €1.5 billion on its liabilities to the International Monetary Fund.