The collective action clauses implemented in 2013 have already signalled to investors that they should expect a debt haircut if a government becomes overindebted.
In order to be in an even better position to hold bearers of government bonds liable for their decisions, it would be helpful to have in place a mechanism that automatically extends the maturities of government bonds should a country receive funds from the ESM. This would prevent a situation in which European taxpayers pay off private creditors.