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Do separatist nations inherit any national debt?

For example, given Spain has a debt level of £1.1 trillion at the time of writing, if Catalonia becomes an independent nation is there any legal burden of responsibility upon them to repay any of this debt themselves or does all the debt remain with "Spain"?

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  • No clear what framework this question has in mind? You mean international law when asking about legal burden? If yes, this question should be tagged as such. Dec 30, 2023 at 21:36

3 Answers 3

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If the debt were to be transferred, it would be because of negotiations between Catalonia and Spain for Catalonia to take that debt on and at what level. It would seem reasonable to me for negotiators from Spain to ask for it, since supposedly the people of Catalonia might have contributed to it and since the Catalans are in essence asking Spain for something (to become independent and renounce their territorial claims).

This all assumes, of course, that Spain would ever agree to sit down and negotiate such a break which seems highly doubtful.

When the U.S. broke away from Britain much of the reasoning was because of Britain's war debt from the French and Indian War and how the Crown decided to pay for it (by taxing the Yankees). The colonies revolted, and the Treaty of Paris finalized American secession from her parent. There were provisions in the treaty related to recognizing lawful contracted (private) debts that were, in general, ignored.

But the key point is that none of the debt the British government incurred was transferred to the former colonies because the Americans would not have agreed to it. So the general answer to your question is that no, debt does not transfer automatically when a state becomes independent. But whatever debt there may be would probably be a pretty contentious topic while negotiating independence, whether it occurs with or without a civil war.

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    As a side note when Haiti declared independence from France, France declared Haiti owed 150 million francs for its loss of slaves. The modern equivalent of $21 billion was paid from Haiti to France.
    – James T
    Oct 18, 2017 at 11:53
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It would be a matter for discussion.

When the Soviet Union broke up, Russia accepted the full foreign debt of the Soviet Union. This was restructured by the "Paris Club", and left Russia with a debt of about $60 billion.

On the other hand, when Czechoslovakia split, the national property and national debt were shared, roughly in the ratio 2:1. This was a result of negotiations between the administrations of the two countries.

There is no "one size fits all" answer to this question. The division of a state's assets and debts is a matter for the countries concerned, and their creditors. There are several possibilities.

  1. The successor states agree to share the debts equally or according to some formula. This is possible if the separation is friendly.
  2. One state agrees to accept all the debt. This is possible if one of the states is significantly larger and wants to be seen as the successor state.
  3. One or all of the successor states refuse to accept the debt, and creditors then judge that a default has occurred. This is most likely if the separation is disputed or chaotic. Croatia was judged to be in default from '93 to '96 following and during the Yugoslav wars.

What would happen in a specific case would depend on the nature of the separation, and the skill of the negotiators (or strength of the soldiers)

Spain has shown no sign of being willing to enter negotiations on a secession for Catalonia. In the unlikely event of a violent separation, Catalonia would not automatically inherit the debt, and creditors would look to Spain, to pay its debt. Failure of Spain to pay would be a default. As noted, this is not a likely scenario.

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    To add to the picture, when the Russian Tsarist empire collapsed the Bolshevic government refused to recognize its debts and when the Ottoman empire was dissolved Turkey did not accept that it was its successor. The German republic that succeeded the empire did recognize the inherited debts but evaded paying them. Oct 18, 2017 at 6:41
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    It is possible that e.g. Germany can say "We will acknowledge Catalonia as a nation, if you accept x% of Spain's debt to us." Germany can also pressure other nations by various means to say the same thing. Catalonia may choose to accept that. With many nations acknowledging Catalonia independence, Spain may accept it too. (Also an unlikely scenario, but possible) Oct 18, 2017 at 8:37
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    @StigHemmer While this is a possibility, it enters the realm of "negotiations between Catalonia and Spain", even if reluctanctly forced by a third party.
    – Rekesoft
    Oct 18, 2017 at 9:32
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It depends on the nature of the agreement or lack thereof

Independance can be radical or moderate, gradual or sudden, negotiated(brexit) or forced(ukraine), and the new country may inherit debts in it's regional programs, it may have assets frozen, trade barriers...

You can see from the Brexit negotiations that even a constitutionally predicted seperation are centered over the extent of the shared debt, versus the customs and trade agreements.

When Scotland had an independence referendum, one of the biggest negotiations would have been over national Gas and Oil mining operations and rights in Scotland.

Honestly the question is a thesis query, and more precision or knowledge of the topic would have shown that you thought about it and have some further thoughts on the topic, to make it less vague to honestly respond to.

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  • can substitute that for "when Scotland had an independence referendum". I am 50% scottish so I should obviously use more specific wording. May 6, 2020 at 16:51

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