A Viable Insolvency Procedure for Sovereigns (VIPS) in the Euro Area

Fuest, Clemens; Heinemann, Friedrich; Schroeder, Christoph

doi:10.2139/ssrn.2486528

Cited by 11 publications

(19 citation statements)

References 18 publications

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“…Phasing in the mechanism through the issuance of new bonds, this proposal lends more credibility to the introduction of an effective no-bailout regime in contrast to proposals that set an introduction date far in the future, such as Fuest et al (2014). Alternative solutions to the transition problem that cope with legacy debt immediately would obviate the need for a phase-in period altogether.…”

Section: Nuts and Boltsmentioning

confidence: 99%

“…An optional, complementing element to protect a concluded debt restructuring from litigation by holdout investors is to introduce an enforcement moratorium to the ESM Treaty as proposed by or Fuest et al (2014), among others. The immunity clause would protect the assets of a member state from attachment during and after an ESM programme as long as it has loans drawn from the ESM.…”

Section: Nuts and Boltsmentioning

confidence: 99%

“…Another discretionary approach focuses on a country's prospects to regain durable market access. In the proposals of Corsetti et al (2011) andSchröder (2014), deeper debt restructuring is triggered after an initial period of liquidity support if deemed necessary to regain market access. While Corsetti et al (2011) do not mention a maturity extension during an initial 2-year period of ESM liquidity support, Fuest et al (2014) imply a maturity extension during the initial 3-year 'shelter period' of ESM crisis assistance.…”

Section: Figurementioning

confidence: 99%

“… Fuest et al (2014) advocate an immediate ESM Treaty change which becomes effective after certain criteria are met, but at the latest in 2030. Restructuring, facilitated by CACs and an immunity clause in the ESM Treaty, is triggered if market access is still not sufficient after a standstill for the duration of an ESM programme.…”

mentioning

confidence: 99%

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A mechanism to regulate sovereign debt restructuring in the euro area

Andritzky¹,

Christofzik²,

Feld

et al. 2018

International Finance

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in

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Section: Nuts and Boltsmentioning

confidence: 99%

Section: Nuts and Boltsmentioning

confidence: 99%

Section: Figurementioning

confidence: 99%

mentioning

confidence: 99%

See 2 more Smart Citations

A mechanism to regulate sovereign debt restructuring in the euro area

Andritzky¹,

Christofzik²,

Feld

et al. 2018

International Finance

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“…Thus, we need a new institutional procedure in European economic governance soon, especially an 'exit option' and an 'insolvency' arrangement for EMU member countries [26,27].…”

Section: Modeling European Governancementioning

confidence: 99%

Modelling Monetary and Fiscal Governance in the Wake of the Sovereign Debt Crisis in Europe

Herzog

2016

Economies

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This paper analyzes different government debt relief programs in the European Monetary Union. I build a model and study different options ranging from debt relief to the European Stability Mechanism (ESM). The analysis reveals the following: First, patient countries repay debt, while impatient countries more likely consume and default. Second, without ESM loans, indebted countries default anyway. Third, if the probability to be an impatient government is high, then the supply of loans is constrained. In general, sustainable and unsustainable governments should be incentivized differently especially in a supranational monetary union. Finally, I develop policy recommendations for the ongoing debate in the Eurozone.

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Longstanding Sources of Instability: The Current Deficits of the Economic Union

Lionello¹

2019

Studies in European Economic Law and Regulation

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A Viable Insolvency Procedure for Sovereigns (VIPS) in the Euro Area

Cited by 11 publications

References 18 publications

A mechanism to regulate sovereign debt restructuring in the euro area

A mechanism to regulate sovereign debt restructuring in the euro area

Modelling Monetary and Fiscal Governance in the Wake of the Sovereign Debt Crisis in Europe

Longstanding Sources of Instability: The Current Deficits of the Economic Union

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