Law Commons^™

The Pricing Of Non-Price Terms In Sovereign Bonds: The Case Of The Greek Guarantees, Stephen J. Choi, Mitu Gulati

Faculty Scholarship

In March 2012, Greece conducted one of the biggest and most brutal sovereign debt restructurings ever, asking holders of Greek government bonds to take net present value haircuts of near 80 percent. Greece forced acquiescence to its terms from a large number of its bonds by using a variety of legal strong-arm tactics. With the vast majority of Greek bonds, the tactics worked. There were, however, thirty-six bonds guaranteed by the Greek state, which, because of the weakness of the underlying companies, were effectively obligations of the Greek state. Yet, on these thirty six bonds, even though Greece desperately needed …

Talking One's Way Out Of A Debt Crisis, Lee C. Buchheit, G. Mitu Gulati

Faculty Scholarship

The policy of Euro-area officialdom in the period 2010-2011 was to avoid, at all costs, a default and restructuring of the sovereign debt of a member of the monetary union. This policy was motivated principally, but not exclusively, by a fear that the international capital markets, if forcibly reminded of the precarious position of overindebted, growth-challenged members of a monetary union, might recoil generally from lending to European sovereigns. In short, they feared contagion.

The only alternative to permitting a debt restructuring, of course, was an official sector bailout. The afflicted countries -- Greece (until 2012), Portugal, Ireland and Cyprus …

Can Greece Be Expelled From The Eurozone? Toward A Default Rule On Expulsion From International Organizations, Joseph Blocher, Mitu Gulati, Laurence R. Helfer

Faculty Scholarship

The ongoing European crisis has raised uncomfortable questions about the conditions under which treaty-based unions of nations like the EU or the EMU can legally expel a member—Greece being the most obvious candidate. The EU, for example, has rules governing the voluntary withdrawal of members, but says nothing about whether a member can be expelled. As a matter of international law, what does the silence mean? Put differently: What is the default rule regarding expulsions when a treaty says nothing about forced withdrawals? Is there an absolute bar on expulsion, as some have suggested? Conversely, is there an implicit right …