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[...] In January this year, Eurogroup agreed it would be useful to establish a set of common principles and benchmarks. In March, the group agreed on some core common principles that would be a signpost for reform of national insolvency systems that remain a creature of their national legal system. “Speed, cost and predictability are of the essence for efficient national insolvency regimes, together with clear rules on cross-border insolvency… In particular, creditor claims in secured lending should be enforced in an effective manner.” Naturally enough, a trigger for the whole discussion was the need for Eurozone banks to clean up their balance sheets so they could resume proper lending to the real economy.
The macro-economic effects of poor insolvency processes in a world of high debt levels have also been recognised so the Country Specific Recommendations for 2016 specified improvements for a number of countries, and also the Eurozone as a whole. As a result, the economic policy establishment is now obliged to engage with the problem rather than just leave it to obscure, specialist lawyers who may be those with a vested interest in prolonging proceedings - at correspondingly high cost and unpredictability. [...]
Commissioner Hill is committed to reaching for a high-hanging fruit that has eluded his predecessors for decades. A proposal is expected later this year and he may yet succeed because the problem is now seen as a serous macro-economic one - especially in states where the consequence of the debt overhang have become an urgent political problem for `growth and jobs’. The necessary `political will’ may finally be at hand.
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