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Collective Action Clauses in Euro area

In accordance with  of the ESM Treaty (Paragraph 3 of Article 12) the model CAC will become mandatory in all new euro area government securities with maturity above one year issued on or after 1 January 2013, and not 1 July 2013, as previously contemplated.

Its introduction will not affect any euro area government securities issued prior to that date unless those securities include a collective action clause that allows for their modification on a cross-series basis on the terms contemplated in the model CAC. As a result and except as just noted, euro area government securities issued prior to 1 January 2013 will not be subject to modification as part of a cross-series modification pursuant to the model CAC.

Prior to the decision to introduce EA model Collective Action Clauses, CACs had already been introduced in some EU Member states' international issuance, following developments in G10 context.

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