The global financial crisis has proven to be one of the worst and mostdemanding events ever. According to common understanding, it is highly unlikely for a country to go bankrupt. However, we have seen a number of countries on the verge of bankruptcy, as well as many which have officially gone bankrupt. It is probable that many more will do so in the future. This knowledge has led us to the question: how probable is it that a sovereign might suffer serious solvency problems? The purpose of this study was to apply a multivariate discriminant analysis (MDA) as an effective tool for a recognition and differentiation among defaulted and non-defaulted nations. The performed analysis was based on data up to 2012 for 26 emerging and 20 developed European countries. The results indicated a high predictive power for ‘non-liquid’ macroeconomic variables like import, export, investment, population and GDP ratios, underlining MDA as the most suitable model for insolvency prediction, compared to other popular methods like probit and logit model. But unlike in other studies the debt/ lending/revenue ratios were characterised by weak predictive power.