User Guide

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monthly interest payment for the duration of
the new loan.
The maximum number of loans that you
may take at any one time depends on your abil-
ity to pay the monthly interest charges and each
successive loan incurs a somewhat higher inter-
est rate than the previous one. The base rate
for the first loan is 5%, and then the interest
charged on each successive loan will increase
by 2% for each (thus your second loan would
be at 7%, your third would be at 9%, and so
on). As you repay each loan, the interest rate for
the next loan is reduced by the same 2%.
You will be prohibited from taking any new
loans if your country’s economy does not gen-
erate enough income to cover the total monthly
interest requirements of all outstanding loans.
This calculation is based upon the amount of
money that your country would generate if the
treasury investment slider was set at 100%;
thus, it is still possible to take a loan when you
are running a budget deficit, provided that the
interest would be less than your total monthly
income.
Bankruptcy
It is extremely dangerous to draw the maximum
number of loans that your country’s economy
can support. If for any reason you are forced
to make a payment that would require taking
a new loan, your country will be plunged into
bankruptcy. This can occur if you are running
a monthly budget deficit; if you’ve defaulted on
a loan; or possibly as a result of a random or his-
torical event that demands a payment of some
kind. If your country goes bankrupt, you will
receive an on-screen message to notify you of
this event and its devastating effects:
• All of your current loans are eliminated,
as is the balance of whatever amount you
owed that forced the bankruptcy.
• Every province in your country will suffer
a +1 increase in its risk of revolt for the next
five years.
• Your armies and navies will be demoralized
and be much more likely to turn tail and
run from combat for the next five years.
• Any new loans that you take in the next
five years will incur an additional 10%
interest rate charge over and above their
usual interest rates.
• Your country's current inflation value will
be increased by 5%, plus an additional 1%
for each loan that has been defaulted.
• Any advisors currently serving in your
court will depart since you have demon-
strated an inability to pay for their serv-
ices.
• Any mercenaries that are currently part of
your military will immediately leave your
employ. This will happen even if they are
in the midst of combat.
Needless to say, you should avoid bankruptcy
at all costs. If your country does go bankrupt,
you should probably try to avoid any wars and
attempt to lay low for the full five years until
the effects have worn off.
War Taxes
Wars can be fairly expensive, requiring extraor-
dinary expenditures to recruit and maintain
new forces. In the periods of history covered
by the game, it was fairly common for special
“war taxes” to be levied on a population. Click-
ing the “Raise War Taxes” button will provide
a 50% increase to your country’s tax income
and will last for one full year; however, this
will also displease your population, causing an
increased risk of rebellion in all of your prov-
inces for the next 12 months. It is advisable to
do this only in case of emergency; preferably,
when your country’s stability is high enough to
overcome its negative effects.
You may only raise war taxes when your
country is already at war. The button will be
greyed out if you are at peace, or if you have
already raised war taxes within the last 12
months.