Developer Diary #22 – Loans and Debt

[Phelan]

so the swiss AI will declare war on sardinia on day one of the game in order to gain a port?

Would it not be a simple solution to not allow oversea credits for landlocked countries? They could get their money from other countries on the same continent.

Otherwise I can see a lot of angry swiss pops, because they don't get their interests. And making war as swiss with paraguay isnt a good idea without ports and ships....

 

[King]

Well then, as Sute]{h asked, what are the strings attached borrowing from them, can they ask for a little of everything in return or..?

No they are just simply backup finiance to make sure that a perfectly good country is not screwed due a temopary shortage of capital. They only lend to you if you have low debt.

 

[Earl Uhtred]

I shall assume, however, that these shadowy cartels would have to be transnational like the Illuminati or Free Masons. Shadowy indeed.

Perhaps the diabolical financiers could demand reforms or changes in government in exchange for their coin. Something like that happened at various points in Latin American history.

 

[Sute]{h]

No they are just simply backup finiance to make sure that a perfectly good country is not screwed due a temopary shortage of capital. They only lend to you if you have low debt.

So they are actually more philanthropic than shadowy.

 

[unmerged(57903)]

Landlocked country can both loan and lend, Landlocked lenders are down the pecking the order when it comes to repayment. If landlocked country does default it goes straight to CB.
Money is automatically withdrawn.

Can some thought be given to a situation where creditor and debtor are attached to one another - Prussia and the Netherlands, say. I imagine the Dutch would be hastier paying their neighbours back even if they had no ships than they would the Turks who are still making do with balsa wood. Otherwise I accept the abstraction, I guess.

...Although it would be nice if debts could be purchased from one power who can't reclaim by another who can...

 

[Orinsul]

Perhaps the diabolical financiers could demand reforms or changes in government in exchange for their coin. Something like that happened at various points in Latin American history.

king's already said no to that

 

[Sleepyhead]

No they are just simply backup finiance to make sure that a perfectly good country is not screwed due a temopary shortage of capital. They only lend to you if you have low debt.

I see, that makes sense. They won't be demanding a higher interest then either?

I'm curious as to what views you guys had regarding a larger monetary policy. I know you didn't include inflation in the game and of course, letting everybody use the same currency (£) I can see as really reasonable for game play reasons. Still, did you have any considerations concerning monetary policies?

 

[King]

I see, that makes sense. They won't be demanding a higher interest then either?

I'm curious as to what views you guys had regarding a larger monetary policy. I know you didn't include inflation in the game and of course, letting everybody use the same currency (£) I can see as really reasonable for game play reasons. Still, did you have any considerations concerning monetary policies?

none at all

 

[Rhion]

It was mentioned that your fleet can't attack creditor gunboats? So what are the possible defences against gunboat diplomacy? (Except not defaulting on your debt of course.)

It's not because I'm neck-deep in debt that I have to take such abuse lying down, is it?

Edit: And what if I have the biggest, baddest fleet of them all?

 

[Orinsul]

surely if you declared war you could attack it?

 

[Rhion]

Then does the debitor get a CB/war goal if the creditor uses "gunboat diplomacy"?

 

[King]

It was mentioned that your fleet can't attack creditor gunboats? So what are the possible defences against gunboat diplomacy? (Except not defaulting on your debt of course.)

It's not because I'm neck-deep in debt that I have to take such abuse lying down, is it?

Edit: And what if I have the biggest, baddest fleet of them all?

There is no defence

 

[CaptRobau]

Looking at this, debt and the current gunboat diplomacy system (use it to force in-debt countries to pay) can simulate a lot of examples of gunboat diplomacy/foreign intervention such as the Opium War and the French intervention in Mexico. But how are things such as the Agadir Crisis and even more importantly the Opening of Japan (by Commodore Perry). In the latter case debt is not an issue (as Japan wants nothing to do with the rest of the world). Is it handled by events/decisions?

It'd be cool if you could use gunboat diplomacy to force other changes on a country than debt-paying. To simulate the opening of Japan, gunboat diplomacy would cause the ruling party to change their economic policies from protectionist to free trade (not exactly sure if there's a step in between, limited free trade or something).

 

[Balesir]

The international lending reflects an international debt market funded by savings via national banks, if I understand correctly. Is there, then, some kind of "rebalancing" mechanism between national banks? I'll try to illustrate by example:

Suppose I have a big project to increase my country's prosperity and I borrow to fund it. My own national bank is soon tapped out, so I borrow from country B's national bank. So far, so good.

Now, suppose the 'project' works and my POPs get more prosperous and fund my national bank further. Seeing this, country B decides to undertake a similar project, and borrows from my newly funded national bank to do so.

Now, my POPs are owed money by country B, while country B's POPs are owed money by me. Is there some mechanism by which they will trade paper so as to "repatriate" some of that debt?

 

[Rhion]

There is no defence

I'm confused...Does this mean "gunboat diplomacy" is a sort of decision or diplomatic action and doesn't require physically sending ships to the creditor's coast?

 

[FmrPFCBob]

Have you given thought to those people who will want to use the loans and default to instigate a war with their creditors? I can envision threads after release where some players will deliberately take out loans in the hopes of having them serviced by a nation they wish to fight (I understand they have no control over who holds the loan) then defaulting on the loans and gunboat enforcement just to give that nation a CB.

I know its overly complicated and gamey but it will probably come up.

 

[Rhion]

Have you given thought to those people who will want to use the loans and default to instigate a war with their creditors? I can envision threads after release where some players will deliberately take out loans in the hopes of having them serviced by a nation they wish to fight (I understand they have no control over who holds the loan) then defaulting on the loans and gunboat enforcement just to give that nation a CB.

I know its overly complicated and gamey but it will probably come up.

And what's wrong with instigating war and giving other nations a CB on you?
EU3 even had "send insult" which did exactly that.

 

[King]

The international lending reflects an international debt market funded by savings via national banks, if I understand correctly. Is there, then, some kind of "rebalancing" mechanism between national banks? I'll try to illustrate by example:

Suppose I have a big project to increase my country's prosperity and I borrow to fund it. My own national bank is soon tapped out, so I borrow from country B's national bank. So far, so good.

Now, suppose the 'project' works and my POPs get more prosperous and fund my national bank further. Seeing this, country B decides to undertake a similar project, and borrows from my newly funded national bank to do so.

Now, my POPs are owed money by country B, while country B's POPs are owed money by me. Is there some mechanism by which they will trade paper so as to "repatriate" some of that debt?

No we won't

 

[King]

I'm confused...Does this mean "gunboat diplomacy" is a sort of decision or diplomatic action and doesn't require physically sending ships to the creditor's coast?

pretty much

 

[King]

Have you given thought to those people who will want to use the loans and default to instigate a war with their creditors? I can envision threads after release where some players will deliberately take out loans in the hopes of having them serviced by a nation they wish to fight (I understand they have no control over who holds the loan) then defaulting on the loans and gunboat enforcement just to give that nation a CB.

I know its overly complicated and gamey but it will probably come up.

No, since you borrow off your own people first. An invasion could end up being the least of your worries.