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Ep. 130 Debt as a Lever for Power
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Russia was France’s one ally and so much of the French investment capital was tied up in Russia that by the time we get to 1912, 1913, the French could not allow their one ally to fail, to falter in any way. Potentially, I think that there are some parallels here — for the Russian Empire, the perception was that Russia was a great power and was going to continue to be a great power and would not be defaulting on its debt. Being able to lend money, of course, indicates that you have financial strength that allows very often an expression of soft power, the ability to influence to invest; but being able to actually borrow money and being perceived as a good investment by foreign investors and foreign states, that’s a source of strength as well.