Sovereign default has become a reality in Greece with profound implications for the rest of the Euro Area and the international financial system. This paper looks at what lessons can be learnt by examining the last major sovereign default in Argentina 2002. It argues that it is risky to treat investors unfairly as it can lead to countries being locked out of international financial markets with adverse consequences for their eventual recovery. Despite the political pressures to punish investors they need to be treated fairly to limit the adverse consequences, both immediately in terms of other vulnerable countries and in the future for the return of defaulted states to the financial markets.