Creditor Participation Clauses: Making No Bail-Out Credible in the Euro Area
Europe is still in a fragile situation. Threats are coming from many sides. The macroeconomic environment has weakened: The world economy has been slowing down, especially due to lower growth in China and other emerging economies. Consumer price inflation has remained low in spite of an ultra-loose monetary policy in the euro area and elsewhere, mainly due to the massive decline in oil prices. The political situation has become less stable, with nationalist parties gaining ground in many countries, an increasing polarisation of the population, and the political balance shifting towards parties opposing reforms and consolidation. Epitomising these hazards, the danger of Brexit is looming. Moreover, public debt levels are very high by historical standards, and the threat of a return of the euro area crisis is not banned. Greece, which is back in the headlines, may be a special case, but rising spreads in other countries like Portugal demonstrate that the problem is not confined to Greece. Finally, while the issue of refugee migration has dropped out of media attention, the current solution may not prove durable. Given these fragilities, the question of how to move forward in Europe is of great importance: Should we strive for more integration, or rather strengthen the existing framework?
Andritzky, J., L. Feld, C. Schmidt, I. Schnabel und V. Wieland (2016), Creditor Participation Clauses: Making No Bail-Out Credible in the Euro Area. In Franklin Allen, Elena Carletti, Joanna Gray und G. Mitu Gulati (Hrsg.), Filling the Gaps in Governance: The Case of Europe. Florenz: European University Institute, 67-74.
DOI: 10.2870/76043