Boundary objects in complex governance systems: collective action clauses in European sovereign debt governance
Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt
Standard
Boundary objects in complex governance systems : collective action clauses in European sovereign debt governance. / Haagensen, Nicholas.
I: Journal of European Public Policy, Bind 31, Nr. 2, 2024, s. 586-609.Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt
Harvard
APA
Vancouver
Author
Bibtex
}
RIS
TY - JOUR
T1 - Boundary objects in complex governance systems
T2 - collective action clauses in European sovereign debt governance
AU - Haagensen, Nicholas
PY - 2024
Y1 - 2024
N2 - This contribution argues that policymakers instrumentalise legal ambiguity to provide solutions to crises and achieve their preferences in complex governance systems. It looks at the Eurozone crisis and the introduction of sovereign debt restructuring as part of the policy solution. Despite initial opposition from the European Central Bank (ECB) and European Commission (EC), as well as negative market reactions, Greece’s debt was restructured in 2012. The notion of collective action clauses (CACs)—a private contractual term in bond documentation that enables bondholder coordination—was promoted as the credible tool for enabling sovereign debt restructuring. However, this paper argues that the success of CACs is related to how it functions as a boundary object, enabling a shared space of interpretive flexibility that allows policymakers to interpret CACs in terms of their preferences, despite a lack of consensus on the permissibility of future Eurozone sovereign debt restructurings. While enabling cooperation, this interpretive flexibility leads to different iterations of CACs—the Euro-CAC and Greece’s retrofit-CAC—which connects EU fiscal policy to monetary policy in a way that induces legal uncertainty as to the viability of future debt restructurings vis-à-vis the ECB’s bond-buying programmes.
AB - This contribution argues that policymakers instrumentalise legal ambiguity to provide solutions to crises and achieve their preferences in complex governance systems. It looks at the Eurozone crisis and the introduction of sovereign debt restructuring as part of the policy solution. Despite initial opposition from the European Central Bank (ECB) and European Commission (EC), as well as negative market reactions, Greece’s debt was restructured in 2012. The notion of collective action clauses (CACs)—a private contractual term in bond documentation that enables bondholder coordination—was promoted as the credible tool for enabling sovereign debt restructuring. However, this paper argues that the success of CACs is related to how it functions as a boundary object, enabling a shared space of interpretive flexibility that allows policymakers to interpret CACs in terms of their preferences, despite a lack of consensus on the permissibility of future Eurozone sovereign debt restructurings. While enabling cooperation, this interpretive flexibility leads to different iterations of CACs—the Euro-CAC and Greece’s retrofit-CAC—which connects EU fiscal policy to monetary policy in a way that induces legal uncertainty as to the viability of future debt restructurings vis-à-vis the ECB’s bond-buying programmes.
U2 - 10.1080/13501763.2022.2143867
DO - 10.1080/13501763.2022.2143867
M3 - Journal article
VL - 31
SP - 586
EP - 609
JO - Journal of European Public Policy
JF - Journal of European Public Policy
SN - 1350-1763
IS - 2
ER -
ID: 325637645