FRANKFURT (MNI) – To ensure adequate private sector involvement in
future Eurozone bailouts, new debt of EMU countries could include a
clause to extend maturities in case the issuer receives support from the
European rescue fund, the Bundesbank proposed in its Monthly Report on
Monday.
In addition to the planned Collective Action Clauses, all new bonds
could include standardized conditions which stipulate that the
maturities of each bond would “automatically be extended by three years
as soon as the ESM grants the issuer country financial aid,” the bank
suggested. Other previously agreed conditions would change during these
three years.
Three years could be an appropriate timeframe, as a large part of
require reforms and consolidation measures of the country in question
should be been implemented within this period.
The report also noted that, while details have not yet been
finalized, private sector contribution to the Greek bailout will likely
be “very limited.”
–Frankfurt bureau tel.: +49-69-720142. Email: frankfurt@marketnews.com
[TOPICS: MT$$$$,M$$CR$,MGX$$$,M$$EC$,M$G$$$,M$Y$$$]
