AbstractThe Greek debt crisis prompted EU officials to embark on a radical reconstruction of the European sovereign debt markets. Prominently featured in this reconstruction was a set of contract provisions called Collective Action Clauses, or CACs. CACs are supposed to help governments and private creditors to renegotiate unsustainable debt contracts, and obviate the need for EU bailouts. But European sovereign debt contacts were already amenable to restructuring; adding CACs could make it harder. Why, then, promote CACs at all, and cast them in such a central role in the market reform initiative? Using interviews with participants in the initiative and those affected by it, as well as observations at policy and academic meetings, we attempt to shed light on the puzzle and draw implications for the role of contract techniques in market construction.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Comparative Economics.
Volume (Year): 41 (2013)
Issue (Month): 2 ()
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Web page: http://www.elsevier.com/locate/inca/622864
Legal theory of finance; Eurozone; Sovereign debt; Collective action clauses;
Find related papers by JEL classification:
- F34 - International Economics - - International Finance - - - International Lending and Debt Problems
- F55 - International Economics - - International Relations, National Security, and International Political Economy - - - International Institutional Arrangements
- F65 - International Economics - - Economic Impacts of Globalization - - - Finance
- G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
- G20 - Financial Economics - - Financial Institutions and Services - - - General
- G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
- H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
- H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts
- K2 - Law and Economics - - Regulation and Business Law
- N20 - Economic History - - Financial Markets and Institutions - - - General, International, or Comparative
- P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
- P43 - Economic Systems - - Other Economic Systems - - - Finance; Public Finance
- P48 - Economic Systems - - Other Economic Systems - - - Political Economy; Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
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