Revisiting Sovereign Bankruptcy

Sovereign debt crises occur regularly and often violently. Yet there is no legally and politically recognized procedure for restructuring the debt of bankrupt sovereigns. Procedures of this type have been periodically debated, but so far been rejected, for two main reasons. First, countries have been reluctant to give up power to supranational rules or institutions, and creditors and debtors have felt that there were sufficient instruments for addressing debt crises at hoc. Second, fears that making debt easier to restructure would raise the costs and reduce the amounts of sovereign borrowing in many countries. This was perceived to be against the interests of both the providers of both creditors and major borrowers. This report argues that both the nature and our understanding of sovereign debt problems have changed, over the course of the last decade, in a direction that creates a much stronger case for an orderly sovereign bankruptcy regime today than ten years ago. Pre-crisis policy mistakes are now recognized to be a much more severe problem for borrowing countries than the costs or limited availability of private financing. Recent court rulings – particularly a recent U.S. ruling that gives holdout creditors that decline a restructuring offer the right to interfere with payments to the creditors that accept such an offer. This will complicate efforts to resolve future debt crises on an ad hoc basis. Finally, sovereign debt crises are no longer just a problem in emerging markets, but a core concern in advanced countries as well – particularly in the Euro area. If the Euro is to survive, this will require both better ways to resolve debt crises and stronger, market-based incentives that prevent debt problems from occurring in the first place. To address these problems, policy proposals are presented at two levels: for the Euro area, and globally. A Euro area sovereign debt restructuring regime could be developed by amending the Treaty establishing the European Stability Mechanism (ESM). This would both restrict the scope for lending to highly indebted countries without also restructuring their debts, and protect Euro area members receiving ESM financial assistance from legal action by holdout creditors. At the global level, a number of proposals are discussed, ranging from a coordinated introduction of aggregate collective action clauses that would allow a supermajority of bondholders across all bonds to amend bond payment terms to an amendment of the IMF articles that would limit the legal remedies of holdouts when a debt restructuring proposal has been accepted both by a majority of creditors and endorsed by the IMF

Hände weg von Mindestlöhnen

Mindestlohn, Niedriglohn, Arbeitsplatz, Beschäftigungseffekt, Schwarzarbeit, Schattenwirtschaft, Ordnungspolitik, Arbeitslosigkeit, Arbeitsmarkt, Reform, Dumping, Arbeitnehmer, Armut, Humankapital, Arbeitsangebot, Sozialstaat, Deutschland

Whither growth in central and eastern Europe? Policy lessons for an integrated Europe

In this Blueprint, Bruegel Resident Fellows Zsolt Darvas, Jean Pisani-Ferry, André Sapir and their co-authors Torbjörn Becker, Daniel Daianu, Vladimir Gligorov, Michael A Landesmann, Pavle Petrovic, Dariusz K. Rosati and Beatrice Weder di Mauro argue that in view of the depth of integration in Europe, the development model of the central, eastern and south-eastern Europe (CESEE) region, despite its shortcomings, should be preserved. But it should be reformed, with major implications for policymaking both at national and EU levels. If so, what are the required changes? Bruegel and The Vienna Institute for International Economic Studies (wiiw) cooperated to form this expert group of economists from various European countries to research these issues.

Was the ICO boom just a sideshow of the Bitcoin and Ether Momentum?

We investigate whether the market for ICOs in 2017–2018 and 2021 showed signs of contagion from prices of Bitcoin and Ether. During phases of optimism, ICO daily returns display low correlations with those of Bitcoin or Ether. But when the bubble bursts, correlations jump to very high levels, signaling that the ICO market becomes a sideshow of the cryptocurrency dynamics. We demonstrate that this high correlation was not present during the Nasdaq bubble in the 1990s, signaling that the price dynamics of digital tokens seems to be driven by a common factor, much more than in previous bubbles

Quantitative Nano-characterization of Polymers Using Atomic Force Microscopy

The present article offers an overview on the use of atomic force microscopy (AFM) to characterize the nanomechanical properties of polymers. AFM imaging reveals the conformations of polymer molecules at solid– liquid interfaces. In particular, for polyelectrolytes, the effect of ionic strength on the conformations of molecules can be studied. Examination of force versus extension profiles obtained using AFM-based single molecule force spectroscopy gives information on the entropic and enthalpic elasticities in pN to nN force range. In addition, single molecule force spectroscopy can be used to trigger chemical reactions and transitions at the molecular level when force-sensitive chemical units are embedded in a polymer backbone

Triggered metal ion release and oxidation: ferrocene as a mechanophore in polymers

The introduction of mechanophores into polymers makes it possible to transduce mechanical forces into chemical reactions that can be used to impart functions such as self‐healing, catalytic activity, and mechanochromic response. Here, an example of mechanically induced metal ion release from a polymer is reported. Ferrocene (Fc) was incorporated as an iron ion releasing mechanophore into poly(methyl acrylate)s (PMAs) and polyurethanes (PUs). Sonication triggered the preferential cleavage of the polymers at the Fc units over other bonds, as shown by a kinetic study of the molar mass distribution of the cleaved Fc‐containing and Fc‐free reference polymers. The released and oxidized iron ions can be detected with KSCN to generate the red‐ colored [Fe(SCN)n(H2O)6−n)](3−n)+ complex or reacted with K4[Fe(CN)6] to afford Prussian blue

Warum aus gesamtwirtschaftlicher Sicht weitgehende gesundheitspolitische Massnahmen in der aktuellen Lage sinnvoll sind

Der Bundesrat hat an seiner Sitzung vom 18. Dezember 2020 folgendes Anliegen formuliert: «Das EDI wird beauftragt, dem Bundesrat bis am 13. Januar 2021 eine volkswirtschaftliche Analyse der Taskforce über die Notwendigkeit und die Konsequenzen der bisher beschlossenen Massnahmen vorzulegen.» Die Task Force hat dem Bundesrat seine Einschätzung am 7. Januar 2021 vorgelegt; dieser Policy Brief ist eine überarbeitete Version, welche insbesondere die Hintergründe der Kalkulationen genauer erläutert; an den verwendeten Daten und Annahmen wurde gegenüber der ursprünglichen Version nichts verändert

Towards a More Resilient Euro Area. Ideas from the 'Future Europe' Forum. CEPS Paperback, 18 June 2018

Much progress has been made in improving resilience of the single currency since the beginning of the crisis. But many important issues remain to be tackled. The leaders of euro-area member states are expected to use the European Union Summit on 28-29 June 2018 to take preliminary decisions about which additional reforms to pursue. The run-up to this meeting saw a lively debate involving economists and policymakers, albeit against a backdrop of rising Euroscepticism among and waning trust between European partners. ESMT and the German Council of Economic Experts (GCEE) initiated the ‘Future Europe’ forum in the summer of 2017, aiming to bring together a high-level group of economists to discuss economically sensible, legally sound, and politically feasible concepts that deserved to be taken forward. By offering a forum for discussion, we hoped to foster constructive dialogue. They chose an innovative video-conference format to bring experts together face to face without them having to leave their desks (or living rooms). Some 30 economists took part in a dozen such virtual meetings, and their contributions culminated in a publication, brought out jointly by the Centre for European Policy Studies (CEPS), ESMT and the GCEE. The ebookTowards a More Resilient Euro Area: Ideas from the ‘Future Europe’ forum gathers summaries of these economists’ proposals and the discussions they sparked. The main aim was not to produce a variant of the jointly-authored academic paper, but to foster a lively debate between economists who – as one participant put it – “agree somewhat, but not too much”. The publication as a result combines essays outlining an individual author’s thoughts with summaries of the informed, impassioned, and always respectful discussions during each forum. While each contribution can only be attributed to the respective author, each idea and thought is a valuable input that deserves to be considered by European governments as they set about the next euro-area reforms

Rethinking central banking: committee on international economic policy and reform

This report was written by The Committee on International Economic Policy and Reform, a non-partisan and non-ideological group of independent experts, comprised of academics and former government and central bank officials. The objective of the group is to analyze global monetary and financial problems, offer systematic analysis and advance reform ideas that would ordinarily not emerge from official processes.The Committee will identify areas in which the global economic architecture should be strengthened and work to develop solutions that attempt to reconcile national interests with broader global interests. It will attempt to offer useful suggestions to national policy makers and international financial institutions and foster public understanding of the key issues in global monetary management and economic governance. In this September 2011 report, the committee lays out a framework for rethinking central banking in light of lessons learned in the lead-up to and aftermath of the global financial crisis