{"id":3944,"date":"2021-03-02T13:24:46","date_gmt":"2021-03-02T18:24:03","guid":{"rendered":"https:\/\/www.law.georgetown.edu\/iiel\/?page_id=3944"},"modified":"2025-05-12T11:08:37","modified_gmt":"2025-05-12T15:08:37","slug":"sovereign-debt-law-and-containing-contagion","status":"publish","type":"page","link":"https:\/\/www.law.georgetown.edu\/iiel\/research\/publication-opportunities\/iiel-blog\/sovereign-debt-law-and-containing-contagion\/","title":{"rendered":"Policy Brief: Sovereign Debt Law and Containing Contagion: Reflections on the Great Financial and Eurozone Crises"},"content":{"rendered":"

Published July 10, 2023 by Jay Rappaport<\/a>, Class of 2024 at Georgetown Law, IIEL Fellow.<\/em><\/p>\n

Disclaimer: The views expressed in this article are my own and do not reflect the views of my employer\/firm.<\/em><\/p>\n

I. Introduction<\/u><\/strong><\/p>\n

The desire to limit the crises\u2019 contagion and legal and political circumstances\u2014constraints and opportunities\u2014informed the official sector\u2019s responses to the Great Financial Crisis (GFC) and Eurozone Crisis. Both crises posed great risks of contagion:[1]<\/a> when one country\u2019s economic troubles creates problems in other countries.[2]<\/a> To limit the crises\u2019 contagion, the official sector demonstrated immense shows of economic force, a willingness to support economies with great magnitude and speed.[3]<\/a> Both crises presented legal and political obstacles and opportunities, which impacted how the official sector demonstrated economic shows of force and deployed policy.[4]<\/a> These different legal and political factors help distinguish the official sector\u2019s responses to the GFC and Eurozone Crisis. This brief analyzes each crisis, examining, first, the official sector\u2019s show of economic force and, second, its deployment of policy.<\/p>\n

II. Great Financial Crisis<\/u><\/strong><\/p>\n

II.A GFC: Show of Economic Force<\/strong><\/p>\n

To limit the GFC\u2019s contagion, the official sector responded with an immense show of economic force that reflected the political and legal constraints and opportunities it faced. In April 2009, the Group of 20 (G-20) governments expanded the International Monetary Fund\u2019s (IMF\u2019s) resources from $250 billion to $1 trillion.[5]<\/a> The GFC\u2019s risk of contagion motivated this response. The G-20 president said the IMF needed $1 trillion to \u201cimpress the [global] markets,\u201d[6]<\/a> and the G-20\u2019s communique announcing the expansion identified \u201censuring that capital continues to flow to emerging market and developing countries\u201d as its goal.[7]<\/a> Because the GFC began in the United States (U.S.), an advanced economy,[8]<\/a> supporting emerging market and developing countries\u2019 access to capital constitutes mitigating contagion. That the IMF raised this money through borrowing rather than raising quotas[9]<\/a> reflects political difficulty and legal opportunity. It was too politically difficult to decide the long-debated issue of how much quotas, countries\u2019 contributions to the IMF, should increase[10]<\/a> because increasing a country\u2019s quota expands its voting power at the IMF and the amount it can withdraw from the Fund.[11]<\/a> However, the IMF is legally able to borrow from member countries as well,[12]<\/a> so the IMF borrowed from its members instead of raising quotas.[13]<\/a> The method of borrowing also reflected political realities. \u201cDonating to the IMF is politically toxic,\u201d[14]<\/a> and that was especially true during the GFC and Eurozone Crisis due to concern that the money would support wealthy countries.[15]<\/a> Therefore, instead of referring to the money the countries gave the IMF as loans, the official sector labeled it bonds instead.[16]<\/a> In contrast to a loan, a bond makes crude political sense: bonds indicate a country is diversifying its portfolio by investing in the IMF, which the public can easily understand.[17]<\/a><\/p>\n

The IMF\u2019s changes to the New Arrangements to Borrow (NAB) and establishment of the Flexible Credit Line (FCL) were immense shows of economic might and reflected the official sector\u2019s desire to limit the GFC\u2019s contagion within political constraints. The IMF \u201cexpand[ed] and enlarge[d] the [previous] NAB \u2026 [to] stem[] contagion risks.\u201d[18]<\/a> The IMF also increased the NAB\u2019s \u201cflexibility\u201d to limit global risk[19]<\/a> by creating an \u201cactivation period,\u201d during which the IMF could continue to give a country additional financing without holding successive votes for each installment, as long as the funding stayed within the highest limit at least eighty-five percent of \u201cparticipants\u201d approved initially.[20]<\/a> The IMF created the FCL to limit contagion too: the FCL would support countries on sound economic footing that nonetheless experienced economic \u201cblowback\u201d from the GFC.[21]<\/a> The IMF intended and creditor governments supported the FCL to enable the IMF to aid countries without countries\u2019 experiencing the \u201cstigma associated with the traditional [IMF] lending instruments.\u201d[22]<\/a> Thus, in creating the FCL, the official sector circumvented a political limit, that \u201cstigma.\u201d[23]<\/a> The FCL\u2019s show of force worked numerous times: by having the FCL \u201capproved\u201d for them, Colombia, Mexico, and Poland preserved market access without even needing to draw on their FCL funds.[24]<\/a><\/p>\n

II.B GFC: Deployment of Policy<\/strong><\/p>\n

To respond to the GFC, the official sector deployed economic policy according to political and legal constraints and opportunities it faced. Any use of the NAB would reflect political pressures the IMF faced from member countries as the IMF created several escapes from NAB funding commitments should creditor governments develop their own balance of payment difficulties.[25]<\/a> Conversely, the lifting of political restraints also influenced the official sector\u2019s use of policy. After the U.S. bailed out its automobile industry, the political concern that moral hazard would accompany corporate bailouts eased, allowing the official sector to support some corporate debt restructuring elsewhere.[26]<\/a><\/p>\n

Legal constraints and opportunities also impacted how the official sector implemented economic policy. The IMF may legally provide financing to member countries experiencing \u201cbalance of payments problems\u201d only if the country is making adjustments necessary to address them.[27]<\/a> To adhere to this commitment when a country\u2019s balance of payments deteriorates after receiving an FCL, the IMF developed ex ante<\/em> conditionality: the IMF would require countries have a \u201cstrong track record of policy performance\u201d to receive an FCL.[28]<\/a> This would give the IMF sufficient confidence that the country would continue to \u201caddress its balance of payments pressures.\u201d[29]<\/a> The IMF also invoked its legal capability to issue special drawing rights (SDR\u2019s) to its member countries.[30]<\/a> At least partially to limit the GFC\u2019s contagion, the IMF advocated for increasing SDR allocations,[31]<\/a> and small countries\u2019 governments used their albeit small amount of SDR\u2019s to help insulate themselves from the GFC.[32]<\/a><\/p>\n

III. Eurozone Crisis<\/u><\/strong><\/p>\n

III.A Eurozone: Show of Economic Force<\/strong><\/p>\n

The official sector responded to the Eurozone Crisis first by marshalling immense shows of economic force to limit the crisis\u2019 contagion within legal and political constraints it faced. In response to Greece\u2019s crisis, the IMF and European Commission (EC) built a \u201cwall of money\u201d to help preserve market access, extending Greece a \u201cEUR 110 billion credit line\u201d in May 2010.[33]<\/a> The IMF even lowered its own threshold for the probability of debt sustainability required for a country to receive IMF financing.[34]<\/a> Initially, the official sector decided to lend Greece funds instead of counseling Greece to restructure its debt because the European Union (EU), IMF, and European Central Bank (ECB), \u201cfeared that a Greek debt restructuring would lead to contagion<\/em> for banks, financial markets and institutions, and other Eurozone sovereigns\u201d (emphasis added).[35]<\/a> The EC and ECB\u2014rather than Greek national authorities\u2014supported Greece due to a legal constraint: by entering the Eurozone, countries surrender their monetary policy to Eurozone institutions.[36]<\/a><\/p>\n

The ECB too demonstrated a prodigious show of economic force in order to limit contagion and respond to political constraints. The IMF and EC\u2019s \u201cwall of money\u201d did not restore market confidence because the market did not trust the EC to oversee the Greek bailout as it considered the EC overly politicized.[37]<\/a> The failure to restore market confidence stoked the official sector\u2019s fear of contagion: concern spread that not only Portugal, Ireland, and Greece were in trouble but also France and Italy, which would be both too big to fail or save.[38]<\/a> The ECB responded to these political and contagion concerns with its own show of great economic force. When the ECB announced that it would purchase Greek bonds on the secondary market, then-ECB President Mario Draghi publicly \u201cpromise[d] to \u2018do whatever it takes.\u2019\u201d[39]<\/a> Simply announcing the program\u2014with Draghi\u2019s dramatic guarantee\u2014inspired sufficient confidence for capital markets to return.[40]<\/a><\/p>\n

III.B Eurozone: Deployment of Policy<\/strong><\/p>\n

The official sector deployed economic policy to limit the Eurozone crisis\u2019 contagion using legal opportunities but within political and legal constraints. Many in the official sector wanted Greece to remain in the Eurozone because of the political integration the Eurozone represented.[41]<\/a> The ECB supported Greece\u2019s sovereign bonds to mitigate contagion: the ECB aimed to lower interest rates that were excessively high \u201cin part\u201d because of \u201cthe demand for excessive risk premia for the bonds \u2026 to guard against the risk of a break-up of the euro area.\u201d[42]<\/a> How the ECB supported Greece\u2019s sovereign bonds reflected legal constraints the ECB faced. The EU Treaty \u201cprohibit[s]\u2026 monetary financing of the euro area Member States.\u201d[43]<\/a> To circumvent this legal hurdle, the ECB purchased Greece\u2019s sovereign bonds on the secondary market.[44]<\/a> The European Union Court of Justice would later accept that because the ECB bought the bonds on the secondary market\u2014not from the Greek government directly\u2014it avoided violating the EU Treaty\u2019s prohibition against monetary financing.[45]<\/a> The court also reasoned that the ECB could lower Greece\u2019s interest rates and \u201cmaintain price stability\u201d only through buying the bonds,[46]<\/a> and the ECB was responsible for these objectives due to the Eurozone\u2019s single currency.[47]<\/a><\/p>\n

That the official sector eventually supported restructuring Greece\u2019s debt reflected its desire to contain contagion, and how it conducted the restructuring reveals legal opportunities and constraints it faced. \u201cBy the summer of 2011,\u201d the official sector decided to support \u201ca Greek debt restructuring\u201d because they believed it was \u201cinevitable\u201d[48]<\/a> and, \u201c[i]n the eyes of the IMF at least,\u201d necessary \u201cto place that debt stock on a sustainable basis.\u201d[49]<\/a> Concern over the contagion a Greek default would unleash likely motivated the official sector to endorse a Greek restructuring because contagion concerns had dissuaded the official sector from restructuring initially.[50]<\/a> To restructure Greek debt, the official sector used a legal opportunity. \u201c[A]ppoximately 93% of outstanding GGBs [Greek government bonds] were governed by Greek law.\u201d[51]<\/a> The Greek government used this \u201c\u2018local law\u2019 advantage\u201d to pass a law that \u201cretrofitted a collective action mechanism to \u2026 the debt stock \u2026 governed by Greek law.\u201d[52]<\/a> The collective action clauses (CAC\u2019s) aggregated voting across bond issuances, which again the Greek government could do because of the \u201clocal law advantage.\u201d[53]<\/a> On February 24, 2012, the bondholders triggered the CAC\u2019s and provided Greece debt relief.[54]<\/a> However, the Greek government\u2019s adding CAC\u2019s rather than legislating haircuts directly allowed this debt relief to comport with the European Convention\u2019s legal constraint regarding the \u201cprotection of property\u201d for bondholders who had voted against restructuring.[55]<\/a> By voting to accept the restructuring with sufficient majorities to trigger the CAC,[56]<\/a> the bondholders provided the haircut on their own bonds, allowing the Greek government to avoid illegally confiscating property.[57]<\/a> Greece also had thirty-six bond issuances governed by foreign law, but only seventeen issuances were restructured.[58]<\/a> Because these bonds were governed under foreign law, they had CAC\u2019s originally.[59]<\/a> To restructure these foreign law bond issuances, the bondholders \u201cactivat[ed] \u2026 the bonds\u2019 CACs,\u201d[60]<\/a> exercising CACs\u2019 legal opportunity. However, the official sector did not restructure more foreign law bond issuances because of their CACs\u2019 legal limit: they did not aggregate voting across issuances.[61]<\/a><\/p>\n

The official sector also responded to the Eurozone Crisis by rectifying a legal constraint in the Eurozone bank regulatory system. The Eurozone Crisis demonstrated that national bank regulators were insufficient to regulate the Eurozone\u2019s \u201csingle financial market.\u201d[62]<\/a> The official sector responded accordingly by giving the ECB bank supervisory authority.[63]<\/a><\/p>\n

IV. Conclusion<\/u><\/strong><\/p>\n

The official sector sought to limit the GFC\u2019s and Eurozone Crisis\u2019 contagion, and legal and political constraints and opportunities informed the nature of its responses. To prevent these crises from spreading, policymakers needed to both demonstrate great shows of economic force and deploy both the promised and additional other policies. Both the communication of policy and its use were essential.<\/p>\n

I would like to extend special thanks to Professor Sean Hagan<\/a> for sharing his numerous insights during class lectures, directing me to many sources upon which this paper relies, and providing me with critical feedback throughout the semester.<\/em><\/p>\n

Sources:<\/strong><\/p>\n

[1]<\/a> IMF Press Release, NAB Participants Agree to Expand Fund’s Borrowing Arrangement to up to US$600 Billion, 1 (Nov. 24, 2009) [hereinafter IMF Press Release on New Arrangements to Borrow] (discussing the Great Financial Crisis\u2019 risk of contagion); Lee Buchheit, The Greek Debt Restructuring of 2012, in <\/em>European Central Bank Legal Conference 2016, 46, 47 (European Central Bank: Eurosystem, ed., 2016) [hereinafter Buchheit, The Greek Debt Restructuring<\/em>] (discussing the risk of contagion Greece\u2019s debt crisis presented); e.g.<\/em>, Sean Hagan, Visiting Professor of Law, Georgetown University Law Center, Lecture in Resolution of International Financial Crises: The Great Financial Crisis – Building the International Firewall & The Eurozone Crisis, (March 2022) [hereinafter Hagan lectures].<\/p>\n

[2]<\/a> E.g.<\/em>, Hagan lectures, supra <\/em>note 1; see, e.g.<\/em>, Buchheit, The Greek Debt Restructuring<\/em>, supra <\/em>note 1, at 47.<\/p>\n

[3]<\/a> E.g.<\/em>, IMF Press Release on New Arrangements to Borrow, supra <\/em>note 1, at 1 (expanding the IMF\u2019s NAB and increasing its \u201cflexibility\u201d in response to the GFC); see, e.g.<\/em>, Buchheit, The Greek Debt Restructuring<\/em>, supra <\/em>note 1, at 47 (discussing how the official sector made much funding available to Greece at the onset of its crisis).<\/p>\n

[4]<\/a> E.g.<\/em>, Sean Hagan, Reforming the IMF, in <\/em>International Monetary and Financial Law: The Global Crisis, 40, 59-60 (Mario Giovanoli & Diego Devos, eds., 2010) (discussing how the ex ante <\/em>conditionality of the IMF\u2019s Flexible Credit Line allows the program to comport with legal requirements on IMF financing); see, e.g.<\/em>, Hagan lectures, supra <\/em>note 1 (discussing the Eurozone\u2019s legal architecture that has a single currency for all member countries).<\/p>\n

[5]<\/a> G-20 Communique, Declaration on Delivering Resources Through the International Financial Institutions \u2013 London<\/em>, at 1 (Apr. 2, 2009) https:\/\/www.banque-france.fr\/sites\/default\/files\/media\/2016\/10\/21\/london-declaration2_2009-04-02.pdf<\/a> [hereinafter G-20 Communique]; e.g.<\/em>, Hagan lectures, supra <\/em>note 1.<\/p>\n

[6]<\/a> E.g.<\/em>, Hagan lectures, supra <\/em>note 1.<\/p>\n

[7]<\/a> G-20 Communique at 1, supra <\/em>note 5, at 1.<\/p>\n

[8]<\/a> E.g.<\/em>, Hagan lectures, supra <\/em>note 1.<\/p>\n

[9]<\/a> E.g.<\/em>, id.<\/em>; see generally <\/em>IMF Press Release on New Arrangements to Borrow, supra <\/em>note 1, at 2.<\/p>\n

[10]<\/a> Hagan lectures, supra <\/em>note 1 (discussing the long-standing complaint that the quotas had not kept pace with the development of Brazil, Russia, India, and China (BRIC\u2019s) and other emerging market economies); see <\/em>Articles of Agreement of the IMF art. 3, \u00a72 (discussing the general \u201c[a]djustment of quotas\u201d process).<\/p>\n

[11]<\/a> E.g.<\/em>, Hagan lectures, supra <\/em>note 1; see generally <\/em>Articles of Agreement of the IMF art. 3, \u00a72.<\/p>\n

[12]<\/a> Articles of Agreement of the IMF art. 7, \u00a71.<\/p>\n

[13]<\/a> E.g.<\/em>, Hagan lectures, supra <\/em>note 1; see<\/em> IMF Press Release on New Arrangements to Borrow, supra <\/em>note 1, at 2 (listing the member countries from which the IMF borrowed).<\/p>\n

[14]<\/a> Hagan lectures, supra <\/em>note 1.<\/p>\n

[15]<\/a> Id.<\/em> (describing how, for example, the general counsel of the People\u2019s Bank of China said that it would be very politically difficult for China to help bail out Eurozone countries with three times the GDP\/ capita as China).<\/p>\n

[16]<\/a> E.g.<\/em>, id.<\/em><\/p>\n

[17]<\/a> Id.<\/em><\/p>\n

[18]<\/a> E.g.<\/em>, IMF Press Release on New Arrangements to Borrow, supra <\/em>note 1, at 1.<\/p>\n

[19]<\/a> Id. <\/em>(\u201cThe additional flexibility introduced into the NAB is designed to make it an effective tool of crisis management as a backstop for the international monetary system\u201d).<\/p>\n

[20]<\/a> IMF, New Arrangements to Borrow, in<\/em> Selected Decisions and Selected Documents of the IMF, para. 5a-5b (July 16, 2009) https:\/\/www.imf.org\/en\/publications\/selected-decisions\/description?decision=11428-(97%2F6)<\/a>; Hagan lectures, supra <\/em>note 1.<\/p>\n

[21]<\/a> Hagan, Reforming the IMF<\/em>, supra <\/em>note 4, at 60; Hagan; see<\/em> IMF, Decision Establishing the Flexible Credit Line, in<\/em> Selected Decisions and Selected Documents of the IMF, Thirty-Ninth Issue, para. 1-2 (Mar. 24, 2009, as amended Dec. 6, 2017) (establishing the FCL and announcing that \u201cFCL arrangement[s] shall be approved\u201d for member countries with \u201cstrong economic fundamentals and institutional policy frameworks\u201d among other indica).<\/p>\n

[22]<\/a> Hagan, Reforming the IMF, supra <\/em>note 4, at 60 (describing the IMF\u2019s desire); G-20 Communique, supra <\/em>note 5 (describing G-20 countries\u2019 support of the FCL to \u201caddress stigma concerns\u201d).<\/p>\n

[23]<\/a> E.g.<\/em>, Hagan, Reforming the IMF, supra <\/em>note 4, at 60.<\/p>\n

[24]<\/a> Id.<\/em> at 62; Hagan lectures, supra <\/em>note 1; see <\/em>Poland to Ask IMF for 20.5 billion Flexible Credit Line<\/em>, DW Akademie (Apr. 15, 2009) https:\/\/www.dw.com\/en\/poland-to-ask-imf-for-205-billion-flexible-credit-line\/a-4178606<\/a>.<\/p>\n

[25]<\/a> IMF, New Arrangements to Borrow, supra <\/em>note 20, at para. 6b (describing that if a country develops its own balance of payment problem, then it would be excused from contributing to the NAB); id.<\/em> at para. 11e (announcing that if a country had lent money to the IMF and developed a balance of payment issue itself then it could be repaid early); Hagan lectures, supra <\/em>note 1.<\/p>\n

[26]<\/a> See <\/em>Sean Hagan, Debt Restructuring and Economic Recovery, in <\/em>Sovereign Debt Management, 359, 364-65 (Rosa M. Lastra & Lee Buchheit, eds., 2014); see also <\/em>Hagan lectures, supra <\/em>note 1.<\/p>\n

[27]<\/a> Articles of Agreement of the IMF art. 5, \u00a73; e.g.<\/em>, Hagan, Reforming the IMF<\/em>, supra <\/em>note 4, at 59; e.g.<\/em>, Hagan lectures, supra <\/em>note 1.<\/p>\n

[28]<\/a> IMF, Decision Establishing the Flexible Credit Line, supra <\/em>note 21, at para. 2-3; Hagan, Reforming the IMF<\/em>, supra <\/em>note 4, at 60; Hagan lectures, supra <\/em>note 1.<\/p>\n

[29]<\/a> Hagan, Reforming the IMF<\/em>, supra <\/em>note 4, at 60; Hagan lectures, supra <\/em>note 1.<\/p>\n

[30]<\/a> See, e.g.<\/em>, Articles of Agreement of the IMF art. 18, \u00a71-2; see also<\/em> Hagan lectures, supra <\/em>note 1.<\/p>\n

[31]<\/a> See <\/em>IMF, Allocation of Special Drawing Rights for the Ninth Basic Period: Draft Executive Board Decision and Managing Director Report to the Board of Governors<\/em>, Attachment, para. 6 (Jul. 16, 2009) https:\/\/www.imf.org\/external\/np\/pp\/eng\/2009\/071609.pdf<\/a>.<\/p>\n

[32]<\/a> Hagan lectures, supra <\/em>note 1.<\/p>\n

[33]<\/a> Buchheit, The Greek Debt Restructuring<\/em>, supra <\/em>note 1, at 47; Hagan lectures, supra <\/em>note 1.<\/p>\n

[34]<\/a> Hagan lectures, supra <\/em>note 1 (discussing how the IMF lowered its required threshold from a \u201chigh probability\u201d of debt sustainability\u2014installed in its Crisis Resolution Framework\u2014to merely a \u201c50-50\u201d chance).<\/p>\n

[35]<\/a> Hal S. Scott & Anna Gelpern, International Finance: Transactions, Policy, and Regulation 417 (22nd ed. 2018) (describing the ECB and IMF); Buchheit, The Greek Debt Restructuring<\/em>, supra <\/em>note 1, at 47 (describing the ECB, EU, and IMF); see<\/em> Hagan lectures, supra <\/em>note 1 (discussing how the desire to limit contagion to the rest of the Eurozone contributed to the official sector\u2019s decision to delay restructuring).<\/p>\n

[36]<\/a> See, e.g.<\/em>, Hagan lectures, supra <\/em>note 1.<\/p>\n

[37]<\/a> E.g.<\/em>, id<\/em>; see id. <\/em>(noting also that the market thought that there would be insufficient funding even with the IMF involved).<\/p>\n

[38]<\/a> E.g.<\/em>, id.<\/em><\/p>\n

[39]<\/a> Scott & Gelpern, supra <\/em>note 35, at 419; e.g.<\/em>, Hagan lectures, supra <\/em>note 1.<\/p>\n

[40]<\/a> Scott & Gelpern, supra <\/em>note 35, at 419; e.g.<\/em>, Hagan lectures, supra <\/em>note 1; see<\/em> Eur. Ct. of Justice, The OMT Programme announced by the ECB in Sept. 2012 is compatible with EU Law<\/em>, at 1, (June 16, 2015) https:\/\/curia.europa.eu\/jcms\/upload\/docs\/application\/pdf\/2015-06\/cp150070en.pdf<\/a> (\u201cThe ECB has asserted that simply making the announcement about the OMT programme was sufficient to achieve the effect sought, namely to restore the monetary policy transmission mechanism and singleness of monetary policy\u201d).<\/p>\n

[41]<\/a> E.g.<\/em>, Hagan lectures, supra <\/em>note 1 (describing this desire among, for example, members of the Greek government and EU).<\/p>\n

[42]<\/a> Eur. Ct. of Justice, supra <\/em>note 40, at 1.<\/p>\n

[43]<\/a> E.g.<\/em>, Hagan (citing Article 123 of the EU Treaty); see<\/em> Eur. Ct. of Justice, supra <\/em>note 40, at 1.<\/p>\n

[44]<\/a> Eur. Ct. of Justice, supra <\/em>note 40, at 1; e.g.<\/em>, Hagan lectures, supra <\/em>note 1.<\/p>\n

[45]<\/a> Eur. Ct. of Justice, supra <\/em>note 40, at 3; e.g.<\/em>, Hagan lectures, supra <\/em>note 1.<\/p>\n

[46]<\/a> Eur. Ct. of Justice, supra <\/em>note 40, at 2; e.g.<\/em>, Hagan lectures, supra <\/em>note 1.<\/p>\n

[47]<\/a> E.g.<\/em>, Hagan lectures, supra <\/em>note 1.<\/p>\n

[48]<\/a> Buchheit, The Greek Debt Restructuring<\/em>, supra <\/em>note 1, at 47.<\/p>\n

[49]<\/a> Id.<\/em> at 48; see<\/em> Scott & Gelpern, supra <\/em>note 35, at 418 (\u201cSome proponents [of restructuring Greek debt] pointed out that the alternative\u2014perpetual bailouts\u2014would have been worse than any downside to restructuring\u201d).<\/p>\n

[50]<\/a> Buchheit, The Greek Debt Restructuring<\/em>, supra <\/em>note 1, at 47; Scott & Gelpern, supra <\/em>note 35, at 417.<\/p>\n

[51]<\/a> E.g.<\/em>, Buchheit, The Greek Debt Restructuring<\/em>, supra <\/em>note 1, at 49.<\/p>\n

[52]<\/a> Id.<\/em>; Hagan lectures, supra <\/em>note 1.<\/p>\n

[53]<\/a> Buchheit, The Greek Debt Restructuring<\/em>, supra <\/em>note 1, at 49; e.g.<\/em>, Hagan lectures, supra <\/em>note 1.<\/p>\n

[54]<\/a> Buchheit, The Greek Debt Restructuring<\/em>, supra <\/em>note 1, at 49.<\/p>\n

[55]<\/a> Eur. Ct. of Human Rights, Mamatas and Others v. Greece<\/em>, application nos. 63066\/14, 64297\/14 and 66106\/14, Press Release, at 1, 3-4 (2016) https:\/\/hudoc.echr.coe.int\/eng-press#{%22itemid%22:[%22003-5444603-6823781%22]}<\/a>; Hagan lectures, supra <\/em>note 1.<\/p>\n

[56]<\/a> Buchheit, The Greek Debt Restructuring<\/em>, supra <\/em>note 1, at 49 (noting that \u201cenough [bond]holders [voted] to trigger the collective action mechanism\u201d and the CAC required support from \u201cholders of \u2026 at least two-thirds of the principal amount \u2026 of the Greek law-governed GGB\u2019s,\u201d where \u201cholders of at least 50%\u201d voted \u201ceither in favour or against\u201d); Hagan lectures, supra <\/em>note 1.<\/p>\n

[57]<\/a> Eur. Ct. of Human Rights, Mamatas and Others v. Greece<\/em>, Press Release, supra <\/em>note 55, at 1, 3-4; Hagan lectures, supra <\/em>note 1.<\/p>\n

[58]<\/a> E.g.<\/em>, Hagan lectures, supra <\/em>note 1; see <\/em>Hagan lectures, supra <\/em>note 1 (noting Greece had $19 billion in foreign law bonds); see<\/em> Scott & Gelpern, supra <\/em>note 35, at 419 (noting that Greece had \u201cEUR 29 billion of bonds \u2026 issued under foreign (predominantly English) law or by state owned enterprises backed by government guarantees\u201d).<\/p>\n

[59]<\/a> E.g.<\/em>, Hagan lectures, supra <\/em>note 1; see<\/em> Scott & Gelpern, supra <\/em>note 35, at 419.<\/p>\n

[60]<\/a> Scott & Gelpern, supra <\/em>note 35, at 419; see <\/em>Hagan lectures, supra <\/em>note 1.<\/p>\n

[61]<\/a> E.g.<\/em>, Hagan lectures, supra <\/em>note 1; see<\/em> Scott & Gelpern, supra <\/em>note 35, at 419 (noting that \u201cGreece ultimately chose not to default\u201d and paid completely the non-restructured bond issuances, the holders of which \u201creportedly\u201d included \u201can investment fund that had held out in prior sovereign debt restructurings\u201d).<\/p>\n

[62]<\/a> E.g.<\/em>, Hagan, The Eurozone Crisis: Defining a Path to Recovery<\/em>, 63 Ks. L. Rev., 1067, 1073 (2015); Hagan lectures, supra <\/em>note 1.<\/p>\n

[63]<\/a> E.g.<\/em>, Hagan lectures, supra <\/em>note 1 (describing how the official sector amended the ECB statute to give the ECB bank supervisory authority); see<\/em> Hagan, The Eurozone Crisis: Defining a Path to Recovery<\/em>, supra <\/em>note 62, at 1073-74 (advocating for this change).<\/p>\n","protected":false},"excerpt":{"rendered":"

Published July 10, 2023 by Jay Rappaport, Class of 2024 at Georgetown Law, IIEL Fellow. Disclaimer: The views expressed in this article are my own and do not reflect the […]<\/p>\n","protected":false},"author":6897,"featured_media":0,"parent":3728,"menu_order":3,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_acf_changed":false,"_price":"","_stock":"","_tribe_ticket_header":"","_tribe_default_ticket_provider":"","_tribe_ticket_capacity":"0","_ticket_start_date":"","_ticket_end_date":"","_tribe_ticket_show_description":"","_tribe_ticket_show_not_going":false,"_tribe_ticket_use_global_stock":"","_tribe_ticket_global_stock_level":"","_global_stock_mode":"","_global_stock_cap":"","_tribe_rsvp_for_event":"","_tribe_ticket_going_count":"","_tribe_ticket_not_going_count":"","_tribe_tickets_list":"[]","_tribe_ticket_has_attendee_info_fields":false,"footnotes":"","_tec_slr_enabled":"","_tec_slr_layout":""},"class_list":["post-3944","page","type-page","status-publish","hentry"],"acf":[],"ticketed":false,"_links":{"self":[{"href":"https:\/\/www.law.georgetown.edu\/iiel\/wp-json\/wp\/v2\/pages\/3944","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.law.georgetown.edu\/iiel\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/www.law.georgetown.edu\/iiel\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/www.law.georgetown.edu\/iiel\/wp-json\/wp\/v2\/users\/6897"}],"replies":[{"embeddable":true,"href":"https:\/\/www.law.georgetown.edu\/iiel\/wp-json\/wp\/v2\/comments?post=3944"}],"version-history":[{"count":8,"href":"https:\/\/www.law.georgetown.edu\/iiel\/wp-json\/wp\/v2\/pages\/3944\/revisions"}],"predecessor-version":[{"id":9239,"href":"https:\/\/www.law.georgetown.edu\/iiel\/wp-json\/wp\/v2\/pages\/3944\/revisions\/9239"}],"up":[{"embeddable":true,"href":"https:\/\/www.law.georgetown.edu\/iiel\/wp-json\/wp\/v2\/pages\/3728"}],"wp:attachment":[{"href":"https:\/\/www.law.georgetown.edu\/iiel\/wp-json\/wp\/v2\/media?parent=3944"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}