The history of Russia’s debt is a central element in understanding the 1998 crisis. Russia’s debt stock at the time of the crisis was not overwhelmingly high—especially once account is taken of the fact that the bulk of the debt stock was Soviet-era debt that the Russians rarely paid, and for which creditors had little political will and imperfect mechanisms to enforce payments. The debt problem that drove the crisis was mainly a failure to bring fiscal deficits under control and, therefore, a failure to limit the growth of short-term financing needs. If this flow problem could have been addressed, the stock issue relating to the Soviet-era debt, although a heavy burden, could likely have been resolved. Indeed, international financial markets appear to have operated on this assumption—for example, Russia was able to issue significant amounts of new Eurobonds in 1996–97 while having large external arrears.