King
Chapter 1202 - 1202 198 Integrity Shattered Still in Debt

1202: Chapter 198: Integrity Shattered (Still in Debt) 1202: Chapter 198: Integrity Shattered (Still in Debt) Negotiations dispersed on a sour note once again, but the stance of the Elf Delegation wasn’t as rigid as before.

Upon leaving the venue, Derris fell into a dilemma.

The situation had spiraled completely out of control at this point.

The Moxi Duchy Government had gone bankrupt directly, rendering all their previous preparations futile.

It felt like there was a problem, yet she couldn’t pinpoint where exactly it was.

From the analysis of the data in her hands, the fact that the Moxi Duchy, with its severe fiscal imbalance, had managed not to go bankrupt until now was nothing short of a miracle.

Demanding compensation from a financially bankrupt country is just an indication of insanity.

In her eyes, the Moxi Duchy now epitomized the phrase: “Apology with sincerity, no money to give, and the loss of life being futile.”

Rubbing her forehead, Derris, realizing things were out of control, immediately wrote a letter upon returning to her residence and sent her mount back to the Elf Forest.

…

With the Elf Delegation gone, the representatives of various nations left behind were in disarray.

The Moxi Duchy Government suddenly declared bankruptcy with no prior indication—was this not a trap?

On the surface, the Moxi Duchy owed a hefty foreign debt, and every country present was a creditor to the Moxi Government.

The Moxi Government performed poverty to perfection as a qualified actor.

Even if they had money, they never repaid the interest-free or low-interest loans incurred over the years.

These were all political loans intended as reparations, thus everyone hesitated to press for repayment.

Besides these debts, the governments of various nations also held quite a number of bonds issued by the Moxi Duchy.

These debts were manageable, with interest being settled annually, and they were not far from breaking even.

There were even more debts in the private sector which, aside from the bonds circulated in the market that had been successfully redeemed, were also held by the Major Nobles of various countries.

These nobles weren’t willing to trade them in the market, and the financially “impoverished” Moxi Government obviously could not afford to redeem them prematurely, or else the game could not continue.

Initially, everything was fine.

Although the Moxi Duchy couldn’t repay the principal, it managed to settle the interest annually, which made it a decent investment.

Sadly, starting from today, everything changed.

With the Moxi Government suddenly declaring bankruptcy, all bonds now risked becoming worthless.

With many interest groups involved, representatives dared not take it lightly.

Losing such a huge opportunity would be difficult to justify once they returned.

However, recalling the current predicament of the Moxi Duchy, everyone was unsure how to approach the topic.

If there had been any other choice, no one would let their government go bankrupt.

Such a historically unprecedented event could put George in the textbooks as a bad example for thousands of years!

Including Hudson, who initially only suggested that the Moxi Duchy pretend to be on the verge of financial collapse to plead poverty to the Elf Race.

Never did he imagine that George would be more pessimistic.

After all, what good is “reputation” if it can’t be eaten?

To display weakness to his adversaries, he, the King, couldn’t appear too competent.

Since his reputation would be tarnished sooner or later, it might as well be tarnished for something more valuable.

This also provided a cover for previous issues—an insolvent Moxi Duchy Government doesn’t seem like it could be trafficking legacies across the Continent.

Once a common perception is established, even if evidence is uncovered later, it could be dismissed as framing.

“Your Majesty, what’s going on with your country’s government declaring bankruptcy?”

An elderly Ambassador asked.

“Count Powell, it’s a long story.

The financial crisis of our Duchy dates back to the Orc invasion seven years ago.

During the great war, we incurred hefty debts.

If it were only these debts, our national finances might have just managed.

But scarcely a few years after that war ended, another war broke on the Continent.

Since then, our national finances started on an irreversible path of insufficient income.

We’ve tried all means but could only hold on until now.

This diplomatic crisis is just the catalyst for financial bankruptcy.

Even without the trouble from the Elf Race, we could at most have lasted another month or two.

Not hiding anything from you, in order to cut costs, our Duchy has been forced to downsize our military.

Including the salaries of government employees this month, we can’t even pay them now!”

George spread his hands in a gesture of helplessness.

“Poor”—it had to be displayed openly for everyone to see.

Without first deceiving the human nations, how could he fool the Elf Race?

Although the negotiations earlier successfully deceived the Elf Delegation temporarily, they would undoubtedly intensify their intelligence gathering next.

Without taking a drastic measure, it would be impossible to gain trust from the Elves.

Thus, the previous act would have been in vain.

As expected, upon hearing George’s explanation, the crowd fell silent.

Everyone had a rough idea of how much the Moxi Duchy had sacrificed in the war; financial bankruptcy was a natural consequence.

“Your Majesty, how do you plan to resolve the massive foreign debts your country owes?”

Count Powell asked tentatively.

Deep down, he felt some sympathy for the plight of the Moxi People.

If there were any other choice, he would not have wanted to press for payment at such a time, but he couldn’t offend the powerful elites at home!

“Count Powell, our Duchy will not evade our debts.

However, as you all know the current situation of our government,

As early as three years ago, we were borrowing anew to repay old debts, straining to fill the financial gaps, but now we simply can’t plug the shortfall anymore.