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An EMF with a Sovereign Insolvency Mechanism

An EMF with a Sovereign Insolvency Mechanism

Greece’s catastrophe has revived the idea of sovereign insolvency. Probably due to the no-bailout rule, even quarters highly inimical to it before could suddenly imagine this solution. Technically, some form of insolvency solution is unavoidable in the case of a bankrupt debtor, whether corporation, individual or public entity, and insolvency has proved the best option tested over centuries. Adam Smith already called sovereign insolvency least hurtful to creditors and least dishonourable to debtors.