Strauch, Rolf, Rojas, Juan, O’Connor, Frank, Casalinho, Cristina, de Ramón-Laca Clausen, Pablo, Kalozois, Phaedon, (2016), “Accessing sovereign markets – the recent experiences of Ireland, Portugal, Spain, and Cyprus“, ESM Discussion Paper Series, June
Every European government needs market access. It needs to be able to finance itself at affordable prices on financial markets. To most, market access seems unproblematic and is normally taken for granted. The daily work of Debt Management Offices (DMOs) rarely becomes front-page news. During the euro crisis, this critical market access broke down or was restricted in Ireland, Portugal, Spain, Cyprus, and Greece.
Euro area countries granted each of these countries financial assistance to enable them to re-establish or consolidate that market access. A key role of the temporary rescue fund, the European Financial Stability Facility, and later the permanent rescue fund, the European Stability Mechanism, is to facilitate that process. The rescue funds’ financial package entails economic adjustment programmes that overcome structural weaknesses or imbalances and loans at favourable conditions to rebuild investors’ trust and overcome restrictions to market access.
This discussion paper shares the experiences of several of these euro area countries as they sought, successfully, to re-establish or consolidate full, affordable market access. The first section sets the stage for the subsequent country sections. It presents an overview of the European sovereign debt crisis and market access of peripheral countries. The country sections are written by the heads of the DMOs and therefore present a first-hand practical account of the respective country’s debt management strategy. They substantiate key market conditions, issuance profiles, interaction with primary dealers and investor relations.
Relevant Posts
- Gabrijelčič, Mateja, Herman, Uroš, Lenarčič, Andreja, (2016), “Firm Performance and (Foreign) Debt Financing before and during the Crisis: Evidence from Firm-Level Data“, ESM Working Paper Series, July
- Walter, Stefanie, (2016), “Why austerity is easier to implement in some countries than others – and why this was not the case for Greece”, LSE EUROPP Blog, 17 October