Harry Huizinga, 18 November 2011

Harry Huizinga talks to Viv Davies about his recent paper on the EFSF. Huizinga concludes that the creation of the EFSF has resulted in the bail out of both banks and countries, that the use of EFSF funds has been expensive and inefficient, and that there is a limit to the extent to which the EFSF can be scaled up. Nevertheless, he suggests that this may be a blessing in disguise. The interview was recorded on 17 November 2012.

Dimitri Vayanos, 11 November 2011

Dimitri Vayanos of the London School of Economics talks to Viv Davies about Greece and the eurozone crisis, and argues that leaving the euro would be a disaster for both Greece and Europe. They discuss the bailout package, the appointment of Lucas Papademos as Prime Minister and the benefits of a coalition government of technocrats. Vayanos maintains that the emphasis for Greece should be on deeper institutional and structural reforms. The interview was recorded on 10 November 2011.

Charles Wyplosz, 04 November 2011

Greek Prime Minister Papandreou made a stand this week. Even though he was backed down, this column argues that he did the EZ a favour by providing an opportunity to change course. One way or another, a disorderly Greek default is in the cards with its attendant contagion. At that point a real solution is inevitable – one that requires EZ leaders and the ECB to play on the same side with credible rules for all.

Juan José Cruces, Christoph Trebesch, 13 October 2011

What are the financial costs of a sovereign default? This column presents new data on investor losses – haircuts – in all sovereign debt restructurings between 1970 and 2010. Countries imposing high haircuts take significantly longer to reaccess capital markets after the event and subsequently pay higher interest rates.

Marco Onado, 02 September 2011

Growing pessimism and a spread of contagion is still haunting the Eurozone. This column argues that if the crisis moves beyond Greece, Ireland, and Portugal, no capital injection can reassure markets about possible losses on a few big Eurozone countries. What is needed is a credible restructuring of the debt of peripheral countries to ring-fence the damage.

Guido Tabellini, 15 July 2011

The Eurozone crisis is tearing Europe apart. This column argues that Eurozone leaders must (i) agree to create European-level institutions to monitor national budget and banking policies and (ii) draw a line between solvent and insolvent Eurozone nations before the markets do it for them. It adds that we are now discovering that a loss of sovereignty became inevitable the day we decided to create the single currency.

Paolo Manasse, 05 February 2011

Recent press reports suggest that Greece and Ireland may be allowed to buy back some of their debt. This column provides an example to show that if the purpose of the restructuring is to reduce the burden of payments for the debtor and to have creditors share the losses, a unilateral partial default or a debt swap would be preferable to a buyback.

Beatrice Weder di Mauro, Jeromin Zettelmeyer, 26 November 2010

The bailout of the Irish government has turned up the heat on Europe’s leaders. This column argues that it is time for a serious debate over one possible solution: A European Sovereign Debt Restructuring Mechanism.

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