This chapter reviews the role of Mexican debt in the macroeconomics of stabilization, and argues that the overhang of debt service creates uncertainty about the sustainability of the exchange rate. The credible, medium-term reduction of external transfers is an essential condition for achieving macroeconomic stability and growth. Mexico had accumulated significant debt in the period prior to World War I. From 1913 until 1942 the country was in debt moratorium, even though there were occasional negotiations and agreements with the creditors, as for example in the 1920s. Mexican policymakers are aware of the potential difficulties. They have started judging debt-equity swaps more accurately in terms of the costs and benefits, thus dampening some of the early enthusiasm, but perhaps also clearing the way for them to become a more productive, albeit smaller, part of long-term debt solutions. Mexican officials have always insisted that Mexico does not want confrontation on the debt.