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Why an ESM programme could be a kiss of death: Recovery values and subordination. CEPS Commentary, 27 June 2012

Gros, Daniel (2012) Why an ESM programme could be a kiss of death: Recovery values and subordination. CEPS Commentary, 27 June 2012. [Policy Paper]

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    Abstract

    Spain, needing a bailout for its banks, was granted a vague promise by EZ leaders for up to €100 billion. The details remain obscure, yet they matter enormously. This column argues that the so-called ‘subordination effect’ of fresh official lending could put Spain on the slippery road to ruin. It argues that if sovereign bonds must be bought, this should be done in the secondary market which, would be on an equal footing with private investors and thus avoid the subordination trap.

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    Item Type: Policy Paper
    Subjects for non-EU documents: Countries > Spain
    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: 03 Jul 2012 14:38
    Number of Pages: 4
    Last Modified: 03 Jul 2012 14:38
    URI: http://aei.pitt.edu/id/eprint/35686

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