i " , , , i . , Foreign debt and financial fragility in the perspective of the emerging countries * MARIO TONVERONACHI Introduetion The aim of these notes is to analyse some basic aspects of the evolution and management of foreign debt folIowing the financial fragility ap- proach proposed by Hyman Minsky (1986) and later extended to for- eign debt by Jan Kregel (2004). Minsky defines financial fragility in terms of the financial struc- tures that characterise different types of economie units in alI situa- tions, hence not only in periods of stress. Financial fragility must then be distinguished from financial instability, dynamic analysis of which requires to add complex causaI relations among the selected variables. I shall not go into Minsky's instability analysis, which I see as having necessarily been developed at a lower level of abstraction, namely at a more case specific level. The present analysis is primarily directed at clarifying both the conditions that lead to external financial fragility, i.e. the ones related to foreign debt servicing, and the distinction be- tween external and domestic fragility. Section 1 outlines Minsky's theory of financial fragility, while section 2 builds on the extension of Minsky's approach to the analysis o Università degli Studi di Siena, Dipartimento di Economia Politica, Siena (Italy); e-mail: tonveronachi@unisi.it. * Thelaper is a revised version of a lecture given at the Posgrado en Finanzas, Universida Nacional de Uruguay, August 2005 . The author thanks Elisabetta Monta- naro, Silvia Marchesi and two anonymous referees for help fui comments on an earlier version of this papero BNL Quarterly Review, voI. LIX, no. 236, March 2006, pp . 23-48 .