DOI: 10.47743/jss-2025-71-3-16

Faculty of Law, "Alexandru Ioan Cuza" University of Iași.

Abstract: The Greek sovereign debt crisis revealed the weaknesses of the European financial structure when faced with the pressures exerted by vulture funds. These funds refused to participate in the debt restructuring, relying on the protection offered by the foreign jurisdictions in which the bonds had been issued, and they bet on the holdout strategy, demanding full repayment, including interest, under much more favorable conditions than those accepted by other creditors. The situation clearly showed how important it was for the European Union to have clearer regulations in place. In response, Collective Action Clauses () were introduced in 2013 for government bonds in the euro area. These clauses were designed to make it possible for a debt restructuring to be decided by a qualified majority of creditors, preventing minority creditors from blocking the process. This paper will explore the legal and economic basis for this mechanism and also look at the changes made in 2022, when the new aggregated voting system was introduced, with the goal of reducing the excessive influence of speculative funds in debt restructurings.

Keywords: Collective Action Clauses, vulture funds, sovereign debt, European Union

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