We review the impact of the global financial crisis, and its spillovers into the sovereign sector of the euro area, on the international “rules of the game” for dealing with sovereign debt crises. These rules rest on two main pillars. The most important is the IMF’s lending framework (policies, financing facilities, and financial resources), which is designed to support macroeconomic adjustment packages based on the key notion of public debt sustainability. The complementary pillar is represented by such contractual provisions as Collective Action Clauses (CACs) in sovereign bonds, which aim to facilitate coordination among private creditors in order to contain the costs of a debt default or restructuring. We analyze the most significant changes (and their consequences) prompted by the recent crises to the Fund’s lending framework, not only in terms of additional financial resources, new financing facilities (including precautionary ones), and cooperation with euro-area institutions, but also as regards the criteria governing exceptional access to the Fund’s financial resources. We highlight a crucial innovation to these criteria, namely that, for the first time, they now explicitly take account of the risk of international systemic spillovers. Finally, we discuss how the recent crises have provided new political support for a broader dissemination of CACs in euro-area sovereign bonds. Importantly, in the first case involving an advanced economy, CACs were activated in the debt exchange undertaken by Greece in Spring 2012.

A fact-based treatise on the Eurozone crisis, with analysis of possible solutions The Incomplete Currency is the only technical — yet accessible — analysis of the current Eurozone crisis from a global perspective. The discussion begins by explaining how the Euro's architecture, the relationship between finance and the real economy, and the functioning of the Eurosystem in general are all at the root of the current crisis, and then explores possible solutions rooted in fact, not theory. All topics are analysed and illustrated, making extensive use of examples, tables, and graphics, and the ideas presented are supported by data sets and their statistical elaborations throughout the book. An extensive digital component includes numerical simulations of public debt dynamics for different Eurozone countries, evaluations of the sustainability of programmes like the Fiscal Compact, and stress tests on the ability of institutions like the ESM to cope with major liquidity crises, and the spreadsheets used to calculate data in the book is provided for readers to access for themselves. The survival of the European monetary union has been questioned due to the accumulation of structural imbalances and the negative effects of the global financial crisis. This book lays out the full extent of the problem, explains what caused it, and provides possible solutions backed by extensive data. Dig down to the root of the Eurozone crisis Learn why austerity doesn't fix anything Understand how the Euro has changed economies Consider possible strategies for recovery In a macroeconomic context where the monetary policy is the prerogative of the European Central Bank and fiscal policy, hopeless austerity works against the economic recovery of the Eurozone countries. A positive attitude is difficult, but necessary. The Incomplete Currency is an insightful, important resource that guides readers toward real solutions.

Poor public resource management and the global financial crisis curbing fundamental fiscal space, millions thrown into poverty, and authoritarian regimes running successful criminal campaigns with the help of financial assistance are all phenomena that raise fundamental questions around finance and human rights. They also highlight the urgent need for more systematic and robust legal and economic thinking about sovereign finance and human rights. This edited collection aims to contribute to filling this gap by introducing novel legal theories and analyses of the links between sovereign debt and human rights from a variety of perspectives. These chapters include studies of financial complicity, UN sanctions, ethics, transitional justice, criminal law, insolvency proceedings, millennium development goals, global financial architecture, corporations, extraterritoriality, state of necessity, sovereign wealth and hedge funds, project financing, state responsibility, international financial institutions, the right to development, UN initiatives, litigation, as well as case studies from Africa, Asia and Latin America. These chapters are then theorised by the editors in an introductory chapter. In July 2012 the UN Human Rights Council finally issued its own guidelines on foreign debt and human rights, yet much remains to be done to promote better understanding of the legal and economic implications of the interface between finance and human rights. This book will contribute to that understanding as well as help practitioners in their everyday work. The authors include world-renowned lawyers and economists, experienced practitioners and officials from international organisations.

This book identifies a paradigm shift in international investment law and enquires into how states reassert control over investment treaties.

First came the financial and debt crisis in Greece, then government financing difficulties and rescue programs in Ireland in 2010 and Portugal in 2011. Before long, Italy and Spain were engulfed by financial contagion as well. Finally in 2012, the European Central Bank pledged to do "whatever it takes" to preserve the euro area with purchases of government bonds, a step that achieved impressive results, according to William R. Cline in this important new book. One of the world's leading experts on fiscal and debt issues, Cline mobilizes meticulously researched and forceful arguments to trace the history of the euro area debt crisis and makes projections of future debt sustainability. He argues that euro area leaders made the right decision to keep the euro from breaking apart but warns against complacency about the future. Cline contends that troubled European economies should continue their fiscal consolidation but that further debt restructurings for most countries are not called for. Greece is a special case and may need some further debt relief contingent on continued progress on fiscal and structural reform, however. In this landmark study, Cline offers a detailed analysis of the mistakes, successes, and options for Europe as it struggles to overcome its worst economic disaster since World War II.

The ramifications of the Global Financial Crisis, which erupted in 2007, continue to surprise not only the general public but also finance professionals, economists, and journalists. Faced with this challenge, Preparing for the Next Financial Crisis goes back to basics. The authors ask: what do theory and empirical observations tell us about the causes and the consequences of financial crisis and instability? In what has become an increasingly complex financial world, what lessons can we learn from economic policies, which have been implemented, and research, which has developed extremely rapidly in recent years, so as not to repeat past mistakes? In this comprehensive review of the literature, which is both complete and balanced, the authors highlight the points of consensus among economists and policymakers. They assess the capacity of economic policies and institutions in limiting the cost of financial instability. In conclusion, they ask if the financial system has become safer, in the light especially of the Covid-19 Global Crisis. Ten years after the GFC crisis, this is a timely review of the reform agenda, the progress made, and the areas where further changes need to be made to address new risks and challenges.

The Research Summaries in the March 2013 Research Bulletin discuss "Trade Finance and Its Role in the Great Trade Collapse" (JaeBin Ahn) and "Sovereign Debt: How to Track Who Is Buying and Selling It" (Serkan Arslanalp and Takahiro Tsuda). The Q&A looks at "Seven Questions on the Implications of Global Supply Chains for Real Effective Exchange Rates" (Rudolfs Bems). Readers can also find in this issue a listing of recent IMF Working Papers, Staff Discussion Notes, and Recommended Readings from IMF Publications. The Bulletin also includes a call for papers for a research conference and information on free access to the IMF Economic Review in April.

Redefining Capitalism in Global Economic Development reconsiders capitalism by taking into account the unfolding forces of economic globalization, especially in Asian economies. It explores the economic implications and consequences of recent financial crises, terrorism, ultra-low interest rates that are decades-long, debt-prone countries and countries with large trade surpluses. The book illuminates these economic implications and consequences through a framework of capitalist ideologies and concepts, recognizing that Asia is redefining capitalism today. The author, Li, seeks not to describe why nations fail, but how the sustainability of capitalism can save the world. - Merges capitalist theory with global events, as few books do - Emphasizes ways to interpret capitalist ideas in light of current global affairs - Reframes capitalism via economics, supported by insights from political science, sociology, international relations and peace studies

The crisis in the euro area is a defining moment in the history of European integration. It has revealed major flaws in the architecture of the European Union; it has challenged European institutions to shape an appropriate response; and it has tested the patience of a European public that is eager to see their economic prospects improve again. This volume brings together some of the world’s top economists and policymakers to explain how this crisis came about and what is to be done. The policy agenda these chapters establish is going to be difficult to implement, not least because of popular misunderstanding and political opposition. This book argues, that it is essential that European policymakers push forward this agenda or they run the risk of seeing Europe’s economies fall back into crisis. This book was previously published as a special issue of the Journal of European Integration.

The study calls for a two-track strategy: first, deep multilateral liberalization involving phased but complete elimination of industrial-county protection and deep reduction of protection by at least the middle-income developing countries, albeit on a more gradual schedule; and second, immediate free entry for imports from high risk low-income countries (heavily indebted poor countries, least developed countries, and sub-Saharan Africa), coupled with a 10-year tax holiday for direct investment in these countries.