EU Supports Debt Rules in Retreat From Merkel Demands
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European finance leaders backed a Franco-German compromise on post-2013 sovereign bailouts that waters down calls by German Chancellor Angela Merkel for investors to assume losses and share the costs with taxpayers.
The plan will ask investors to take write-offs on a “case-by-case” basis, according to a statement issued late yesterday by euro-area finance ministers after a meeting in Brussels to ratify a bailout for Ireland. The proposal is designed to address “collective action clauses” for debt issued after temporary crisis facilities expire in 2013. Such clauses allow bondholders to change terms of their contracts.