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Review of Expert Determinations of the International Swaps and Derivatives Association by Domestic Courts

A central policy concern since the onset of the Greek debt crisis in 2010 has been whether sovereign debt restructurings trigger credit default swaps (CDS). CDS are insurance-like financial products whereby a protection seller agrees to pay the protection buyer in case of a credit event on a reference entity (in this case Greece) in return for a premium over a defined period of time. The legal framework for CDS transactions is largely standardized. More than 90 percent of CDS transactions are based on the ISDA Master Agreement. As a mechanism for creditors to hedge against the default of a debtor, CDS are financial instruments to redistribute risk (or, according to their defenders, to shift risk onto those entities willing and capable of better bearing such risks). Over the last two decades, CDS on sovereign debtors became increasingly common. Greece's debt restructuring in February/March 2012 was the first to be implemented under the umbrella of a large number of CDS (more than 2.5 billion Euros in net terms).  During the implementation phase of the Greek restructuring in March 2012, several…

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Integration Through Fear

Quos Deus vult perdere prius dementat! The manner in which Europe is addressing its grave crisis seems to be validating this piece of wisdom attributed to Euripides, Seneca and others. One manifestation is an argument which has become prevalent. In his very first speech as Premier elect to the Italian Senate,…

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Eurozone Crisis: All Eyes on Karlsruhe

Michael Waibel is a British Academy Postdoctoral Fellow at the University of Cambridge. On 7 September 2011, the German Federal Constitutional Court gave judgment in three joined cases regarding the constitutionality of German financial assistance to Greece and of its guarantees to the European Financial Stability Facility (EFSF). The Eurozone…

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Greek Rescue – Act II

Michael Waibel is a British Academy Postdoctoral Fellow at the University of Cambridge. After losing a disastrous war to the Ottoman Empire in 1898, Greece was unable to service its existing debt or to pay an indemnity. The major European powers, alongside private bondholders pushed for the establishment of an international commission of financial…

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60 Years since the First European Community – Reflections on Political Messianism

I The European construct has played a decisive role in the history of the last 60 years. It has created the framework for post-war reconstruction and has ingeniously provided the inspiration and mechanisms for a historical reconciliation between nations which hitherto had gone to war with each other – the horrors of which surpass even the…

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