Sovereign Bankruptcy in the European Union in the Comparative Perspective
This paper distinguishes four alternative sovereign debt resolution mechanisms: pure market solutions, modified market solutions, crisis lending by the IMF and other institutions, and the proposed Sovereign Debt Restructuring Mechanism (SDRM). It is hard to find--at the general level of analysis--the unique advantages of SDRM. The assessment of the European Stabilization Mechanism will ultimately depend on its operation, especially whether it will be a tool of subsidizing countries in debt distress or an instrument of fiscal crisis lending. The present fiscal problems in the eurozone are due to the erosion of fiscal discipline and not to the lack of strong compensatory transfers within the eurozone. The right model to look at the conditions for the stability of the eurozone is not a single state but the gold standard-type system, a system of sovereign states with a (de facto) single currency. Based on this analogy and considering modern developments, three types of measures are needed to safeguard the stability of the eurozone: (1) measures that would reduce the procyclicality of the macroeconomic policies and of the economy; (2) reforms that would help the eurozone economies grow out of increased public debt; and (3) steps to increase the flexibility of the economy so that it can deal with the future shocks in a better way.
|Date of creation:||Dec 2010|
|Contact details of provider:|| Postal: 1750 Massachusetts Avenue, NW, Washington, DC 20036-1903|
Web page: http://www.piie.com
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ugo Panizza & Federico Sturzenegger & Jeromin Zettelmeyer, 2009. "The Economics and Law of Sovereign Debt and Default," Journal of Economic Literature, American Economic Association, vol. 47(3), pages 651-698, September.
- Patrick Bolton, 2003. "Toward a Statutory Approach to Sovereign Debt Restructuring; Lessons From Corporate Bankruptcy Practice Around the World," IMF Working Papers 03/13, International Monetary Fund.
- repec:cto:journl:v:24:y:2004:i:1-2:p:57-69 is not listed on IDEAS
- Manasse, Paolo & Roubini, Nouriel, 2009.
""Rules of thumb" for sovereign debt crises,"
Journal of International Economics,
Elsevier, vol. 78(2), pages 192-205, July.
- Nouriel Roubini & Paolo Manasse, 2005. "“Rules of Thumb” for Sovereign Debt Crises," IMF Working Papers 05/42, International Monetary Fund.
- Paolo Manasse & Nouriel Roubini, 2005. "'Rules of Thumb' for Sovereign Debt Crises," International Finance 0509003, EconWPA.
- Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "Varieties of Crises and Their Dates," Introductory Chapters,in: This Time Is Different: Eight Centuries of Financial Folly Princeton University Press.
- Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "This Time Is Different: Eight Centuries of Financial Folly," Economics Books, Princeton University Press, edition 1, number 8973.
- Reinhart, Carmen, 2009. "The Second Great Contraction," MPRA Paper 21485, University Library of Munich, Germany.
- Jeffrey D. Sachs, 2003. "The Roadblock to a Sovereign Bankruptcy Law," Cato Journal, Cato Journal, Cato Institute, vol. 23(1), pages 73-77, Spring/Su.
- Vito Tanzi, 2004. "The Stability and Growth Pact: Its Role and Future," Cato Journal, Cato Journal, Cato Institute, vol. 24(1-2), pages 57-69, Spring/Su.
- Sturzenegger, Federico & Zettelmeyer, Jeromin, 2008. "Haircuts: Estimating investor losses in sovereign debt restructurings, 1998-2005," Journal of International Money and Finance, Elsevier, vol. 27(5), pages 780-805, September.
- Jeronimo Zettelmeyer & Federico Sturzenegger, 2005. "Haircuts; Estimating Investor Losses in Sovereign Debt Restructurings, 1998-2005," IMF Working Papers 05/137, International Monetary Fund.
- Olivier Jeanne & Jeromin Zettelmeyer, 2005. "The Mussa Theorem (and Other Results on IMF-Induced Moral Hazard)," IMF Staff Papers, Palgrave Macmillan, vol. 52(si), pages 1-5.
- Olivier D Jeanne & Jeronimo Zettelmeyer, 2004. "The Mussa Theorem (and Other Results on IMF-Induced Moral Hazard)," IMF Working Papers 04/192, International Monetary Fund.
- Giovanni Dell'Ariccia & Jeronimo Zettelmeyer & Isabel Schnabel, 2002. "Moral Hazard and International Crisis Lending; A Test," IMF Working Papers 02/181, International Monetary Fund.
- Raghuram G. Rajan, 2005. "Institutional Reform and Sovereign Debt Crises," Cato Journal, Cato Journal, Cato Institute, vol. 25(1), pages 17-24, Winter.
- Reinhart, Karmen & Rogoff, Kenneth, 2009. ""This time is different": panorama of eight centuries of financial crises," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 1, pages 77-114, March.
- Ian Vasquez, 1996. "The Brady Plan and Market-Based Solutions to Debt Crises," Cato Journal, Cato Journal, Cato Institute, vol. 16(2), pages 233-243, Fall.
- Mati, Amine & Thornton, John, 2008. "The exchange rate and fiscal consolidation episodes in emerging market economies," Economics Letters, Elsevier, vol. 100(1), pages 115-118, July.
- Anna J. Schwartz, 2003. "Do Sovereign Debtors Need a Bankruptcy Law?," Cato Journal, Cato Journal, Cato Institute, vol. 23(1), pages 87-100, Spring/Su. Full references (including those not matched with items on IDEAS)