Really confused by this. Say debt burdens increase and country A now has to spend more of its income towards servicing its debt to country B, causing a fall in consumption. Country B now has more money to spend on buying goods and services from A though which should make up for the fall in consumption in A by increasing exports, leaving GDP unchanged.

Obviously that’s not what has happened in debt crises like the Greek one so what exactly am I missing?

Really confused by this. Say debt burdens increase and country A now has to spend more of its income towards servicing its debt to country B, causing a fall in consumption. Country B now has more money to spend on buying goods and services from A though which should make up for the fall in consumption in A by increasing exports, leaving GDP unchanged.

Obviously that’s not what has happened in debt crises like the Greek one as GDP has fallen dramatically so what exactly am I missing?