At the beginning of the debt crisis in the euro area a number of economists, political scientists and experts takes the floor on several occasions. They shared great ideas on how to prevent disasters like the one in Greece.
For example, it is offering a clear legal framework for regulated sovereign defaults or the introduction of a European Monetary Fund, modeled on the IMF to oversee the recovery of stuck in crisis countries. After all, apart from a common currency Europe should have a common economic policy, experts claimed.
In short – the Greek shock had reason to bring out deep lessons. But most ideas today do not get anything, wrote in his analysis Die Welt.
1. Right relegation bankruptcy for countries – new chaos instead of order
Like right relegation bankrupt Member is constantly in the focus of international financial policy. Back in 2001, the IMF proposed such a reform. During the Greek crisis this idea was taken up again. But it had never undertaken anything concrete.
The adoption of the Law on bankruptcy will fill a gap in the international financial architecture. Insolvency proceedings Member now happen quite uncontrollably. When Argentina went bankrupt in 2001, there were only losers. Creditors received no money and Argentina also experienced enormous difficulties to raise money. The looming Greek default has the potential to blow up the entire European Monetary Union.
But so far any attempt to introduce an adjustable bankruptcy Member fails. Because this reform would undermine the sovereignty of debtors and creditors’ rights. Must be solved quite awkward questions – when a country falls into bankruptcy? From what amounts should deprive banks and how – Member? And what will happen to bank balance sheets if suddenly given country may declare bankruptcy?