Who would lend to a bankrupt Britain?

Alistair Darling’s budget forecasts assume that Britain can keep borrowing all it wants for the foreseeable future.We may not be so lucky, says Irwin Stelzer

Federico Sturzenegger and Jeromin Zettelmeyer are not exactly household names. They are, respectively, professor at the Universidad Torcuato di Tella, and an adviser to the International Monetary Fund. Some months ago, as I watched Britain roll up debts that would have been unthinkable only a few years ago, I moved their book, published in 2006, from a back shelf to the top of my desk. Where it sat, unmolested, until two things happened.

First, rating agencies got nervous about the quality of the sovereign debt issued by the UK. Next, Dubai World asked its creditors for time to meet its obligation to pay interest on $26 billion of its $80 billion of debt. So Debt Defaults and Lessons from a Decade of Crises (MIT Press), seemed worth a second look.