Nation under debt

With the whole debate on national debt, I come across this interesting piece of history while reading the book "The Lord of finance".

After the first world war, all the european countries (england, france and italy) had amassed huge debts mostly from the US governments. Since the war was the main reason for this large debt, the European countries started clamoring for reducing the debt. Mostly being linked to a war and since US was the biggest debtor, the debts were renegotiated.

Keynes famously announced that in these cases it is the debtor who has the upper hand and asked England to hold out.

England possibly out of its civility gave in first and 80 cents to dollar, France got its debt reduced to 40 cents and Italy negotiated a settlement of 24 cents to dollar holding out till very end and negotiating finally in 1926.

A similar example was when Argentina threatened to default in 2001 and got a deal by which 76% of the defaulted bonds were exchanged by others, of a much lower nominal value (25–35% of the original) and at longer terms.

Key lesson: the countries typically being sovereign and under the false modicum of international law where penalty is non-existent can easily threaten to default and negotiate its debts. This can be key lesson for the bonds of European countries under crisis now.

though it will be interesting to see whether such instances of default, debt restructuring by sovereigns lead to building a higher risk rate in the long term treasury bonds of those countries.
One of the reason for low long term interest rates for US has been the instances of US government always acceding to pay its debt particulatry after the civil war. The free market voices in US will never allow a sovereign default by US.

But if comes to shove, u don't know where the public opinion will turn to.