A larger state can lend to a smaller neighbor at the lower rate available to its own government. That arrangement can make the neighbor's debt easier to service and support stability across the border. The lender gains influence over access to future borrowing. Refusing further help, or delaying a decision, can cause difficulties without demanding immediate repayment of existing loans.
Notable Point · 1:21:44-1:22:39
Cheap loans can give a neighboring state political leverage
Supporting a neighbor's borrowing can promote stability while creating leverage over its future access to credit.