A sovereign default regime for the eurozone
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Financial Markets

A sovereign default regime for the eurozone

Dr. Matthias Kullas
Dr. Matthias Kullas

The European requirements for economic reform and consolidation are being ignored in many capitals. The eurozone countries openly disagree on what role the market should play as a mechanism for ensuring discipline and coordination. To overcome this dilemma, the eurozone should agree on a sovereign default regime for its member states.

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By introducing such a sovereign default regime, the member states would be once again allowed to make their own decisions regarding timing, type and scope of reforms. This would ensure that their economic culture and tradition are taken into account and that they do not feel as though they are under external control. However, it must not be possible for fiscal or economic difficulties in one eurozone country to trigger crises in other eurozone countries.

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A sovereign default regime for the eurozone (publ. 08.27.2015) PDF 934 KB Download
A sovereign default regime for the eurozone