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Euro Area Paves the Way for Easier Sovereign Debt Restructurings

Nikos Chrysoloras and Viktoria Dendrinou, (2018), “Euro Area Paves the Way for Easier Sovereign Debt Restructurings”Bloomberg, 19 Νοεμβρίου

A proposal to simplify euro-area sovereign debt restructurings has gained broad support among members of the common currency, Portuguese Finance Minister Mario Centeno said, as governments move to bolster its tools after the last credit crisis nearly tore the 19-nation bloc apart.

The plan envisages strengthening collective action clauses, which have been mandatory for sovereign bonds issued by euro-area states since 2013. The change would make it more difficult for small groups of creditors to block restructurings, easing efforts to mitigate the effects of a crisis and stabilize markets.

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