Addressing the Debt Crisis in the European Union: The Validity of Mandatory Collective Action Clauses and Extended Maturities

Abstract

The sovereign debt crisis in the European Union has put significant pressure on the fundamental divisions of power between the Union government and member states. One part of the recommended solution for the crisis calls for the imposition of mandatory collective action clauses and extended maturities for all sovereign bonds issued by member states, the first instances of Union-wide fiscal policy choices being forced upon member states. After an explanation of the relevant bond terms, this Comment evaluates the validity of the proposed mandates based on the current state of the framework of power in the EU and concludes that the mandates are valid under the EU implied …