> Just look at how EU was forced to erase more than 50% of Greece's debt.
Greece is a member of the EU.
> Or look at how US hedge funds are still fighting Argentina (in court) to recoup some of the money.
Private interests aren't the nation's interests, until they are large enough or invest enough money into PR, see United Fruit Company.
It also doesn't mean that any and all questions of international diplomacy will be handled by the military. But if push comes to shove, and the country with the far superior military isn't happy with the conditions of the default (or nationalization, or annexation, or... anything, really), they tend to come down not to international contracts, the UN, or ethics, but to military strength. Consider the situation in Ukraine for a well-documented example that certainly would have played out very differently, were Ukraine and Russia similar in military strength (that is in this case: if Ukraine still was a nuclear power).
Greece is a member of the EU.
> Or look at how US hedge funds are still fighting Argentina (in court) to recoup some of the money.
Private interests aren't the nation's interests, until they are large enough or invest enough money into PR, see United Fruit Company.
It also doesn't mean that any and all questions of international diplomacy will be handled by the military. But if push comes to shove, and the country with the far superior military isn't happy with the conditions of the default (or nationalization, or annexation, or... anything, really), they tend to come down not to international contracts, the UN, or ethics, but to military strength. Consider the situation in Ukraine for a well-documented example that certainly would have played out very differently, were Ukraine and Russia similar in military strength (that is in this case: if Ukraine still was a nuclear power).