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The seniority conundrum: bail out countries but bail in private, short-term creditors? CEPS Commentary, 6 December 2010

Gros, Daniel. (2010) The seniority conundrum: bail out countries but bail in private, short-term creditors? CEPS Commentary, 6 December 2010. [Policy Paper]

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    Abstract

    Despite its large size relative to the small Irish economy, the bailout announced by the Eurogroup following its meeting of 28 November 2010 is not working, as evidenced by the continuing rise in risk premiums. CEPS Director Daniel Gros argues in this commentary that part of the problem lies in a seemingly innocuous provision in the proposed permanent successor to the current European Financial Stability Facility in 2013. The argument is tricky, but at the heart of the problem lies the insistence that rescue financing is senior to private debt while simultaneously ruling out rescheduling of short-term debt.

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    Item Type: Policy Paper
    Subjects for non-EU documents: Countries > Ireland
    EU policies and themes > Policies & related activities > economic and financial affairs > financial crisis 2008-on and consequences/reforms
    Subjects for EU documents: UNSPECIFIED
    EU Series and Periodicals: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > Centre for European Policy Studies (Brussels) > CEPS Commentaries
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 11 Jan 2011
    Page Range: p. 5
    Last Modified: 15 Feb 2011 18:40
    URI: http://aei.pitt.edu/id/eprint/15457

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