GLASGOW, SCOTLAND - JANUARY 30: In this photo illustration, Scottish bank notes are placed on a table on January 30, 2014 in Glasgow, Scotland. The Governor of the Bank of England Mark Carney, said yesterday during a speech in Edinburgh, that an independent Scotland would need to give up some power to make a currency union with the rest of the UK work. (Photo Illustration by Jeff J Mitchell/Getty Images)
Jeff J Mitchell—Getty Images
By Salima Koroma
July 9, 2015

In 1945, Britain borrowed $4.3 billion from the U.S. That money prevented Britain from going bankrupt after World War II.

In 2006, Britain finally paid off the last of that loan.

But when a country can’t pay off its debts, what happens? TIME explains in the above video.


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