November 8th, 2011
More and more threatening Figures for the Greek government debt have raised in recent months, growing doubts about the solvency of the Greek state. In national and international level is therefore – despite denials – is increasingly loudly about a “soft” debt restructuring or one does not exist. Some basic problems of such an insolvency procedure will be discussed below.
The starting point of a bankruptcy order for states  should be the question of under what circumstances the fact of bankruptcy is ever satisfied. We distinguish between insolvency and illiquidity to be distinguished. Insolvency of a state – which has gone into debt as under a currency union in local currency – is present, when the net assets of the state that results from the asset base of the state and discounted at an appropriate interest rate value of future budget surpluses net of debt, negative.'s
In particular, the value of future budget surpluses is highly speculative. First, the development budget is even difficult to predict and the other remains open, you should consider what future period. But also of the assets of the state is not easy to define and evaluate. This will only – be possible if it is about to state enterprises or corporate investments – largely objective. In addition to the assessment itself but also the question arises whether the entire national wealth is taken into account or whether it is a “protected assets” are, do not enter into the determination of net assets. One might think here of the recent privatizations frequently mentioned in Greece. For these reasons hardly clear verifiable statements about the solvency or insolvency will make a state.
In contrast, positive net assets in illiquid. In this case, however, there is a liquidity shortage, about the fact that the debts be paid faster than claims. This shortfall can not be controlled by the creditors and suffer corresponding losses.
Objectifiable appropriate criterion for the decision, which is necessary to ensure the debt service on its own. The PÜQ corresponds to the imbalance of the state budget without the interest payments, based on the nominal gross domestic product. Is thus determined and the provision of debt service required PÜQ larger over a period to be determined as the reasonable PÜQ, could the state in question are considered insolvent.
However, it remains in this case, a discretionary decision-making. This depends, in particular,
• what savings efforts
You think you can expect of the state concerned,
• how much can increase revenue and
• what the future economic growth is estimated.
Reasonable PÜQ may also serve a “fair” or a debt rescheduling quantify. In both cases, the measures must be such that reasonable and necessary PÜQ match. The necessary PÜQ by rescheduling or debt relief must therefore be reduced accordingly. A realistic assessment of reasonable PÜQ is important, because the moment in which the insolvency is determined, the country is cut off with security of the financial markets for the foreseeable future and will get no private loans.
The previously described
Insolvency event but will require, first, always a temporary funding of the unavoidable need for liquidity, because the existing primary deficit ratio can be transferred only in the course of several years in a corresponding PÜQ. Even if one shifts the entire debt service in the future, it therefore needs a transitional funding has reached the affected land to the reasonable PÜQ. This contribution to solving the debt problem could contribute supranational “institutions” such as the IMF or the EU.
Could imagine the following load balancing:
• Supranational institutions provide bridge loans are available, which must be operated under a full extent.