The sovereign debt crisis in Europe that started in early 2010 was the ground on which profound institutional reforms of the Economic Monetary Union (EMU) were put into place. It was triggered by the inability of Greece, Ireland, Portugal, and later on also Spain, to continue borrowing from the markets when fears increased that these Member States could default on their sovereign debt. The reasons why these Member States lost their access to the financial markets differed considerably, however. Greece had been suffering from a high level of indebtedness for many years, while rising sovereign debt in Ireland, Portugal and Spain was the result of public bail-outs of the national banking systems. The rescue measures in the latter countries had become necessary when, due to the financial crisis that preceded the debt crisis, a boom in the private housing markets came to a sudden halt. Common features of the development in all these countries were the high levels of sovereign debt and the strong dynamics of indebtedness, so that the governments lost their ability to borrow freely and at interest rates acceptable in the context of public budgetary systems.
The Impact of the Introduction of Uniform European Collective Action Clauses on European Government Bonds as a Regulatory Result of the European Sovereign Debt Crisis
