My presentation at the CIMA EuroMed Forum - Kadir Has University, Istanbul, 13-15 April 2011

1. Responsible sovereign lending and borrowing as a response to the current and future financial and political crises CIMA, Euro-Mediterranean Forum , KadirHas University Istanbul, 13-15 April 2011 George Papadopoulos, Attorney at Law, PhD cand. LL.M. (Univ. of Athens), LL.M. (Univ. of Cambridge)

2. “In finance, everything that is agreeable is unsound and everything that is sound is disagreeable” Winston Churchill, 15 March 1926

3. Sovereign debt. A factor of the current financial and political crisis Excessive borrowing and mismanagement of public funds Odious debts and financing of autocratic regimes

4. Distinguishing features of sovereign debt Features of sovereign debt that put responsible lending and borrowing at risk Intergenerational tensions Mixed motives for lenders Legal immunity Features of sovereign debt that (should) encourage responsible lending and borrowing Fiduciary duties

6. Responsible sovereign lending Realistic assessment of the borrower’s creditworthiness and its ability to repay the loan Duty to inform and advise Due diligence Human rights considerations (cf. Equator Principles) International law

7. Responsible sovereign borrowing Disclosure (Cf. IMF’s Special Data Dissemination Standard ) Rule of law

8. Best practices (A) Debt Management Offices External Audit Mechanism Independency (cf. INTOSAI’s Mexico Declaration) Competence Auditing disclosed debt information Commenting on the fiscal and economic implications Control of the legality and regularity of financial management and accounting Performance audit (“value for money” audit; the 3Es)

9. Best practices (B) Contract Drafting Exit consent Collective Action Clauses (CACs) Pro rata sharing clauses Non-acceleration or no-action clauses Collective representation or engagement clauses Reframing paripassuclauses

10. Responsible sovereign lending and borrowing principles in the context of debt renegotiations Factual and legal obstacles Possible solutions Reexamining the role of Credit Rating Agencies (CRAs) Through the Paris Club

11. Legal Defences Breach of duty to inform and advise Breach of fiduciary duties Corruption and fraud Unclean hands – Abuse of right

12. George PapadopoulosPhD (cand.), LL.M. (Univ. of Athens), LL.M. (Univ. of Cambridge) Contact: george-papadopoulos@cantab.net