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Tag Archives: sovereign debt

To Loot or Not to Loot? How Public-Private Partnerships Harmed Turkey

This article first appeared in the Indian journal Economic and Political Weekly on 18 July 2022. A Murder in Konya Konya is a province in Turkey. On 6 July 2022, about an hour before I started writing this article, a murder news hit the Turkish pages of the internet: “In Konya City Hospital, a patient shot and killed a cardiologist and his secretary today.” Whether the assassin committed suicide or the private security killed him is unknown, although there are both rumours. City hospitals,...

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Lending and Profiteering – Lessons from Argentina’s Recent Debt Problems

Over 30 years ago, Kunibert Raffer (University of Vienna) was first to propose a fair and transparent arbitration process between debtors and creditors for resolving sovereign insolvency, by analogy with Chapter 9 US Bankruptcy Code that provides for an orderly resolution in cases of municipal bankruptcy. (See his paper “What’s good for the United States must be good for the World – Advocating an International Chapter 9 Insolvency”). He is a long-standing critic of the IMF in its lending...

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When Safe Assets Are No Longer Safe

by Joseph Joyce When Safe Assets Are No Longer Safe The U.S. has long benefitted from its ability to issue “safe assets” to the rest of the world. These usually take the form of U.S. Treasury bonds, although there was a period before the 2008-09 global financial crisis when mortgage-backed securities with Triple A ratings were also used for this purpose. The inflow of foreign savings has offset the persistent current account deficits, and put...

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The Restructuring of Sovereign Debt

by Joseph Joyce The Restructuring of Sovereign Debt The economic repercussions of Russia’s invasion of Ukraine will be devastating for many countries that have yet to recover from the pandemic. Higher prices for commodities, particularly energy and food, will increase inflation rates and widen trade deficits for those nations that import those items. Increases in interest rates will raise the cost of debt financing and hamper the ability of...

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The GND and Europe’s next ten years: a plan for resolving the public debt crisis

The centrality of public debt to private capital markets In thinking about the next ten years, we must acknowledge that new times are coming, and they will lead to big changes in the capitalist system. The absolute novelty of the situation in which the COVID-19 crisis has placed the world, and even more markedly, Europe has made the financial and monetary options that have preoccupied economic debate so far, if not obsolete, at least questionable. It is a crisis that obliges us to rethink,...

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From a troubled horizon to a better world?

The Covid-19 crisis is deepening existing fissures and adding new threats to an already scarred and anxious world. As a localized health crisis became a global pandemic, many countries put broad swathes of their economies into a policy induced coma to halt the spread of the virus and ease the burden on overstretched health systems. As a result, the global economy will experience a recession this year on a scale not experienced since the 1930s. The damage will be both lasting and severe,...

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COVID 19-related debt relief: a consortium proposal to the SDR basket countries

By T. Sabri Öncü & Ahmet ÖncüIn Memory of David Graeber (1961–2020)This article first appeared in the Indian journal, Economic and Political Weekly, on 21 November, 2020On 30 March 2020, the United Nations Conference on Trade and Development (UNCTAD) called for a $2.5 trillion COVID-19 crisis package for developing countries.[1] The UNCTAD...

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In Memory of David Graeber – COVID 19-related debt relief

By T. Sabri Öncü & Ahmet Öncü In Memory of David Graeber (1961–2020) This article first appeared in the Indian journal, Economic and Political Weekly, on 21 November, 2020 under the title “A Consortium Proposal to the SDR Basket Countries” On 30 March 2020, the United Nations Conference on Trade and Development (UNCTAD) called for a $2.5 trillion COVID-19 crisis package for developing countries.[1] The UNCTAD proposals were: (i) $1 trillion to be made available through the expanded use...

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A European Debt Agency as a structural response to the crisis

Massimo Amato is Professor of Economics, Bocconi University, Milan. The full paper, whose key points this post seeks to summarise, can be downloaded here in pdf format. ForewordThis post sums up the results of a collective research [1] and aims at providing the fundamental elements of a feasible European Debt Agency (DA). The DA is meant to be charged with financing sovereign debts with advantages both for the Eurozone Member States (MS) and for the system as a whole. The...

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Doing “Whatever It Takes”

The economy slumbers in its induced coma. Businesses are closed, workers furloughed or laid off. But the astonishing headline falls in economic indicaters such as GDP and PMI conceal a grim reality. Businesses are closing not just because they have been ordered to do so, but because they are running out of money. And people who have lost their jobs or become ill are also running out of money. If businesses fail instead of being mothballed, the eventual economic recovery will be slow. And...

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