a credit institution) from making any payments to an FMI will de facto cause that participant to no longer be able to meet its obligations as they fall due. For payment obligations to FMIs, this would place the participant in default.
Excessive government spending and rising public indebtedness were coupled with tighter monetary policy, as authorities struggled to maintain social services, restore full employment, and dampen the inflationary pressures that had been allowed to grow in the 1970s. The effects of this uncomfortable policy mix hit the major industrial countries with varying severity and triggered a debt crisis in the developing world.