Policy Conditionality attached to ESM financial assistance

Author(s):  
Ulrich Forsthoff ◽  
Nathalie Lauer

‘If the euro fails, Europe fails.’ This dictum of the German Chancellor, Ms Angela Merkel, from 2012 marks the importance that the sovereign debt crisis and its solution were accorded in political discourse and action. The European Stability Mechanism (ESM) and its predecessor, the European Financial Stability Facility (EFSF), are a central component of the strategy put in place by the euro states to overcome the crisis. The creation of these institutions and the policies pursued by them have been the subject of intense debate.

2021 ◽  
Author(s):  
Lisa Kanzler

In the course of the financial and sovereign debt crisis, the academic discourse in European legal studies shifted to questions of economic, monetary and budgetary policy, quickly focusing on issues of solidarity-based distribution of sovereign debt, respectively its communitarization. Against the background of these diverse debates, this paper examines the integration potentials of the Lisbon Treaty with respect to fiscal integration. In doing so, it approaches the subject of the study by elaborating its integration potential, which is then measured against the standards of both primary law and German constitutional law.


Author(s):  
Martin Sandbu

This chapter examines the case of Ireland's sovereign debt crisis. It was six months after Greece had been subjected to the troika's tutelage in return for a vast bridge loan, and the eurozone had set up a rescue fund in case other euro states lost access to market funding. Dublin's deficit was on course to hit an incredible 31 per cent of GDP, most of it due to the cost of bailing out collapsing Irish banks. Rumours were rife that Ireland was about to become the first to apply to the new European Financial Stability Facility (EFSF) for financial aid, which would place Irish economic policy, too, under the troika's whip. But even with Dublin's borrowing costs soaring and International Monetary Fund (IMF) officials spotted in the capital, one frazzled government minister after another denied that a eurozone rescue was imminent.


Author(s):  
Michael Whiteman

The Five Presidents’ Report presents a range of actions to complete Europe’s Economic and Monetary Union. This article examines whether the Five Presidents’ Report will lead to significant beneficial reforms, having regard to the European sovereign debt crisis and the legal framework of the Economic and Monetary Union (EMU). The article discusses the background to the production of the Five Presidents’ Report, including how preceding reports responded to the European sovereign debt crisis. The proposals to create a European Deposit Insurance Scheme (EDIS), European Fiscal Board (EFB) and a Eurozone Treasury are focussed upon in this article. The article concludes that the measures proposed in the report do not go far enough towards establishing financial stability in the Eurozone. A key criticism is that counter-cyclical policy has not been the focus of the report’s recommendations on fiscal matters.


2011 ◽  
Vol 217 ◽  
pp. F37-F45 ◽  
Author(s):  
Dawn Holland ◽  
Simon Kirby ◽  
Ali Orazgani

This note examines the impact of rising bond yields in certain Euro Area countries on debt sustainability. It concludes that without the financial assistance of the bailout packages, government debt in Greece would clearly have been unsustainable, while Ireland and Portugal would have been extremely vulnerable. We also examine the case of vulnerable countries which have not received bailouts — Italy, Spain and Belgium. We conclude that while they can absorb some temporary rise, as has been seen in recent weeks, a significant further sustained rise — more than 100–200 basis points — would call their solvency into question in the absence of financial assistance.


2020 ◽  
Vol 17 (2) ◽  
pp. 155-183
Author(s):  
Jonathan Bauerschmidt

The European financial and sovereign debt crisis has fundamentally transformed the banking landscape in the European Union. In order to break the dependence between banks and sovereigns, the European legislator has created a Banking Union. The objective of these legislative measures is financial stability. How can this term be understood and what is the significance of financial stability for the Banking Union? This contribution aims to answer these questions


2013 ◽  
Vol 12 (2) ◽  
pp. 3255-3260
Author(s):  
Stelian Stancu ◽  
Alexandra Maria Constantin

Instilment, on a European level, of a state incompatible with the state of stability on a macroeconomic level and in the financial-banking system lead to continuous growth of vulnerability of European economies, situated at the verge of an outburst of sovereign debt crises. In this context, the current papers main objective is to produce a study regarding the vulnerability of European economies faced with potential outburst of sovereign debt crisis, which implies quantitative analysis of the impact of sovereign debt on the sensitivity of the European Unions economies. The paper also entails the following specific objectives: completing an introduction in the current European economic context, conceptualization of the notion of “sovereign debt crisis, presenting the methodology and obtained empirical results, as well as exposition of the conclusions.


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