Insolvency specialist Nick Hood reckons recovery will be a rough ride in 2010, wherever you are.

The talk this past year or so has been of the Global Recession. But in reality what we have suffered is a large number of quite different recessions in individual jurisdictions, all happening simultaneously and all prompted by the credit crisis – driven in turn by a decade or more of wildly excessive leverage.

While these recessions started more or less at the same time, they are ending well out of synch; recovery phases are playing out at widely varying speeds. The result is going to be a rather strange 2010, with one huge elephant in a number of different national rooms. Exactly what will happen when these economic patients begin to be weaned off the massive fiscal stimulus or quantitative easing packages currently acting as a life support for many of them?

Couple this uncertainty with the risk of debt default, and it is easy to embrace the latest gag going round the City: that sovereign risk is the new sub-prime. The prospects for a variety of European nations, previously thought safe within the Eurozone, are increasingly grim. Ireland remains shell-shocked, Spain’s property and unemployment crisis threatens its social stability and only a fundamental change in Greek attitudes to paying taxes will head off significant problems there.

Looking eastwards, the situation in the Baltic states and the Balkans, as well as the more developed former-Soviet satellites such as Hungary and Romania, is so dire that a return to anything like the previous prosperity could be many years ahead, if it is achievable at all.  

The United Kingdom probably qualifies as too important to fail, in the long run. But the scale of government debt to be forced down the throats of domestic and international investors, plus the strong possibility of a change of government, makes the short and medium term exceptionally murky.

South America has generally weathered the recession well, particularly Brazil.  The exception is poor Argentina, which lags far behind its regional partners on almost every significant economic indicator. There are genuine concerns about the chance of another instalment in its long and inglorious series of sovereign defaults.

But whatever shape the global turnaround turns out to be, and whatever speed at which it progresses, the sad truth is that corporate defaults will go on rising even after the technical ending of this recession. History shows that the recovery phase is by far the most dangerous part of any major financial correction, for the simple reason that as businesses begin to grow again they struggle to find the extra working capital they need. And banks around the world are still quite rightly repairing their ravaged balance sheets, so liquidity will be scarcer than in any previous recovery.

Governments the world over will also be cost cutting hard to correct unsustainable deficits, further threatening sectors dependent on public spending.

So nobody should be surprised when insolvency statistics soar this year to record highs, both in the UK and in other developed countries. No matter what the GDP figures may say, it could well be that 2009 will eventually be judged to have been the lull before the storm.