Which Country Will be First to Default? A very good article. And perhaps the first article to see in the future. Perhaps, many smaller countries would find it absolutely necessary to suspend payments on loans. While the big ones can take their sweet time negotiating the new financial world order, the small ones are facing with crushing debt, halved exports, shortages of food and other necessities. Why would they wait? By suspending payments until some international decisions are made, they would at the minimum have access to the money that otherwise goes out of the door to service debt. That money can help them bridge the calamity. Equador has already done that. It would make sense, since the only penalty is not being able to secure more loans. But the truth is, such countries would not get it anyway, or under the conditions that cannot be met internally. So, what is the incentive in continuing the payments? When it comes to financing the trade, their t rading partners will have the incetive to assist that, as trade is mutually beneficial to both. So, very little on the down side.