Restructuring state debt

Lars Feld: Restructuring state debt is a fundamentally sensible thing to do. Making private creditors partially liable in the case of national bankruptcies provides incentives to everyone involved: It encourages banks to be less lavish about lending money. It encourages debtors to pay off their debts. And it encourages less deeply indebted countries to continue responsibly managing their budgets.
Our current problems stem from the fact that banks -- particularly those in Germany and France -- wouldn't be able to cope with a massive restructuring of state debt. That's why we are rescuing heavily indebted countries. Restructuring the banking sector is just as urgent.
I advocate pragmatic economic policies. I think that we need less state regulation in many areas. But, when it comes to the financial sector, we can't make it without state intervention. spiegel