Clifford Chance
New Euro Area Model Collective Action Clause
13 December 2021
The existing euro area model collective action clause ('CAC') became mandatory in all new euro area government securities with a maturity over one year issued on or after 1 January 2013 as a result of Article 12 of the Treaty Establishing the European Stability Mechanism (the 'ESM Treaty').
At the Euro Summit held on 14 December 2018, the Heads of State and Government of euro area member states confirmed the commitment to reform the 2012 Euro Area CAC, following an announcement by euro area finance ministers earlier that month. These announcements were made as part of policy measures intended to strengthen Economic and Monetary Union.
The EFC Sub-Committee on EU Sovereign Debt Markets (the 'EFC Committee') took on the role of producing the update to the 2012 Euro Area CAC which is again in the form of common terms of reference and is available here.
An explanatory note and voluntary supplemental provisions, have been published alongside this updated CAC (the 'Single-limb CAC').
On 7 December 2021, the Economic and Financial Sub-Committee on EU Sovereign Debt Markets issued a Press Release delaying the introduction of the new Single-limb CAC pending ratification of the related Amending Agreement to the Treaty Establishing the European Stability Mechanism. The press release is available here.
