STUDY Resolving Sovereign Debt Crises Towards a Fair and Transparent„ International Insolvency Framework Second revised edition JÜRGEN KAISER October 2013 „ „ Due to the global financial crisis, external sovereign debt has again become a prob­lem to a broad range of countries – from European high-income countries to the poorest states on earth – even after they had obtained debt relief through existing multilateral initiatives. „ „ Despite long-standing experiences with sovereign insolvencies, however, no mecha­nism presently exists to deal with the complex debt structures of many countries in a comprehensive way. Existing debt workout procedures – such as the Paris Club, HIPC/MDRI, or Brady-style debt conversion – have either been one-off exercises not meant to be applied as a permanent mechanism, or they are reinforcing collective action problems for being piecemeal in character. „ „ This study therefore argues to apply principles and procedures of domestic insolvency to sovereigns, in order to reach a fair and sustainable debt workout. It explains the principles of an ad-hoc or an institutionalised framework, and describes the possi­bilities to obtain political support and technical advice for countries that may find themselves in need of an orderly debt workout process.