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Euro zone discusses rules for easier, more predictable debt restructuring

Euro zone discusses rules for easier, more predictable debt restructuring
Eurogroup President Mario Centeno arrives for a statement prior to a Euro zone finance ministers meeting to discuss reforms of the monetary union in Brussels, Belgium November 19, 2018. REUTERS/Eric Vidal   -   Copyright  Eric Vidal(Reuters)
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BRUSSELS (Reuters) – Euro zone finance ministers discussed on Monday ways to make sovereign debt restructuring easier and more predictable as they seek to put together a package of reforms for December to integrate the single currency area more closely.

The ministers broadly supported the introduction of single-limb Collective Action Clauses (CACs) in euro zone bonds so as to prevent hold-outs in a potential debt restructuring from blocking a deal for all, in hope of better terms.

But while the ministers also supported the idea that the euro zone bailout fund ESM should play a role of a mediator between the sovereign and investors in case of debt problems, debt restructuring should not be automatic.

“There is no support in the room for introducing any automaticity or mechanic approaches in the context of debt restructuring. Rather, we are looking at ways to make it more efficient,” the chairman of the ministers Mario Centeno said.

(Reporting By Jan Strupczewski, additional reporting by Daphne Psaledakis)

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