EU Debt Crisis & Bailout: A JD Supra Legal Reader

[Link: Greece’s Lawyer: EU Bailout Will Cost Trillion Euros & Cyprus Is Next – Bloomberg Law]

Here’s a quick look at what law firms on JD Supra have been writing recently about the Eurozone debt and banking crisis. For your reference:

The Euro Odyssey: An Epic Journey or a Greek Tragedy in the Making? (Morrison & Foerster):

“The future of the European single currency stands precariously balanced. While hoping for the best outcome, prudent financial planning requires businesses to at least consider once unthinkable thoughts about the possible withdrawal of one or more member states from the single currency or even its demise altogether. This possibility has recently become more than just fanciful, since the recent failed election of the new Greek government has called into question Greece’s willingness and ability to adhere to the significant policy reforms and austerity measures required as conditions to the second bail-out…” Read on>>

Financial Services Legislative And Regulatory Update — June 25, 2012 (Mintz Levin):

“European leaders continued to endeavor to find a solution to their economic malaise, while much of the rest of the continent tried to distract themselves with a somewhat different struggle. Perhaps some divine intervention can be interpreted by Germany’s victory over Greece in a European Cup 2012 quarter-final match (though soccer purists were certainly hold otherwise), and during the past week it certainly looked as if Germany and Angela Merkel were holding firm in their demands during the recent G20 summit. The eyes of the world will continue to focus on Europe with next week’s European Council Summit, though some US thought leaders are beginning to indicate that the fortunes of the two continents may not be as tied together as originally believed…” Read on>>

Proposal for a Directive on Recovery and Resolution of Credit Institutions and Investment Firms (White & Case LLP):

“The idea of Banking Union is a political one and the concept may ultimately encompass a variety of legal instruments designed to achieve closer EU integration of banking. Measures which are likely to be considered further at EU level as part of Banking Union include: an integrated system for the supervision of cross-border banks, a single deposit guarantee scheme, and an EU resolution fund. It is possible that the Commission may produce proposals in these areas during the Autumn…” Read on>>

Euro Contingency Planning: Why it is necessary now, what it should cover and how we can help (Reed Smith):

“Despite the market perceiving the results of last Sunday’s Greek elections as a positive development, uncertainty regarding the future of the euro, the eurozone and the EU itself remain in abundance. The various scenarios for the future of the euro, ranging from a single member state leaving the eurozone to the full deconstruction of the euro, make it imperative for companies to take action now. The companies that will weather the coming storm the best will inevitably be those who have proactively considered the various scenarios and implemented plans to mitigate the risks associated with each scenario…” Read on>>

The Euro Crisis: Impacts on Cross-border Contracts (McDermott Will & Emery):

“Even observers sympathetic to the Euro project have begun to view the eventual departure of one or more countries from the Eurozone, and reversion to national currency(ies), as no longer unlikely. The various treaties and arrangements which brought the Euro into being, however, do not explicitly contemplate either forced or voluntary departure of one or more member states from the European Monetary Union (each, a “departing member state”). The circumstances of any such departure could be decisive in determining its effects on commercial and financial arrangements relating to the currency of departing member states…” Read on>>

The Euro issue: a chance to avoid litigation? (Valorem Law Group LLC):

“There has been a great deal of speculation about the collapse of the European common currency, the Euro, should Greece withdraw from the Euro or if Spain’s banking system collapses. It is impossible to know how long or whether the Euro will last. Indeed, given the relative cost to countries like Germany, bailouts are much less expensive. But as we saw when the US Government refused to save the housing market because of the political concern about rewarding speculators, sanity does not always prevail in these matters. As a result, businesses need to prepare for the worst when it comes to their contracts…” Read on>>

Eurozone Break-Up: Contingency Planning for UCITS (Dechert LLP):

“Generally, UCITS are required to implement a documented risk management process that is designed to identify and manage material risks to which UCITS are exposed in relation to the performance of the activity of collective portfolio management. Recent market events and the pending uncertainty with the Eurozone have emphasized the need for a comprehensive review of UCITS risk management procedures to identify and manage all materials risks…” Read on>>

European Commission President Calls for Banking Union (Orrick):

“José Manuel Barroso, president of the European Commission, commented in an interview with the FT this week that all 27 EU countries should submit their big banks to a single cross-border supervisor as part of a banking union. He said that the EU needs to take “a very big step” towards deeper integration if it is to learn lessons from the sovereign debt crisis. Mr Barroso thought that the changes, which would also include an EU-wide deposit guarantee scheme and a rescue fund paid for by levies on financial institutions, could be achieved in 2013 without changes to existing treaties…” Read on>>

Corporate / London: Withdrawal from the Euro: the effect on existing contracts By Hywel Jones (King & Spalding Energy Newsletter):

“Break-up of currency unions is not new, but a Eurozone break-up would be far more complex, if only because of the number of Eurozone States it would affect and the number of possible permutations a break-up could take: a single State or group of States could leave; the euro could disappear completely or re-emerge with a new name; the Eurozone could break-up into different blocks; or to protect their economies as the recession deepens, non-Eurozone States could join or unilaterally adopt the euro or peg, or link, their domestic currency to the euro…” Read on>>

ISDA To Publish Illegality/Force Majeure Protocol (Katten):

“The International Swaps and Derivatives Association (ISDA) is publishing a new protocol to assist derivatives counterparties with their Eurozone contingency planning. The issue addressed by the protocol, which was issued in pre-publication form on June 19, is the absence in the 1992 form of ISDA master agreement of the same type of force majeure and illegality provisions that are found in the standard text of the 2002 version of the ISDA master. These provisions are expected to be helpful in a Eurozone financial crisis that effects the use of the Euro in derivative transactions…” Read on>>

Read additional international finance & banking news & advisories on JD Supra>>