Viet Duc Nguyen

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Topic 1: Proposals for debt restructuring programs for any indebted Eurogroup country

In general, the Republic of Estonia supports the idea of creating and outlining debt-restructuring programs within the Eurogroup. After the experiences of the economic and financial crisis of 2007/2008 and the following sovereign debt crisis of 2010, we could clearly observe that the lack of a comprehensive debt-restructuring program within the European Union exposed the dire threat of an implosion of the European Union itself. Therefore, having certain kind of regulations on how to deal with heavily indebted countries is the first step towards reaching economic and financial stability within the Eurozone.

However, Estonia would like to emphasize the necessity of a sound and responsible domestic fiscal policy as well. It is clearly unreasonable that only the EU partners should bear the debt burden by offering measures such as a debt relief program while the indebted country does not face any serious repercussions for their irresponsible fiscal policy. Therefore, severe fiscal austerity measures enacted by the indebted country are the first requirement for any indebted member state that is applying for assistance. Referring to our own experiences in the aftermath of the global financial crisis, Estonia enacted a number of grave and severe fiscal adjustments in order to get back on track. For example, Estonia cuts its spending by almost six percent of its GDP in 2009 while ...