The research project that I carried out at the Max Planck Institute of Heidelberg on the Restructuring of Sovereign Debt has just been published on the legal journal "Diritto del Commercio Internazionale" (see: G. SALATINO, The Restructuring of Sovereign Debt, in Diritto del Commercio Internazionale, 2020, no. 2, pp. 343-402).
Starting from the experiences of Greece and Argentina, the article examines the main legal issues that may come up when an over-indebted State engages in a restructuring of sovereign debt. More in detail, I stress the unsuitability of the current legal framework.
“New” tools such as “Collective Action Clauses” (CACs) mark an important step forward, however, they neither can address all the various inefficiencies.
Considering the above, many experts long for the establishment of “a kind of” international bankruptcy procedure for States.
In the article I shed some light on the principles upon which - in my opinion - such procedure should be built. I also stress the importance of a new form of conditionality, which should not be felt as "painful" from the population of over-indebted countries (as it happened with Greece and Argentina).
The paper has been submitted to the IMF, the ESM, the EC and the ECB. I hope it may be of help to address the upcoming Covid-crisis.