The following matrix illustrates this approach: Type of borrower  Has ability to pay  Unable to pay  Willing to pay  No action  Restructuring or Ad-hoc funding, failing which, Change in ownership or Liquidation  Unwilling to pay  Change in ownership and Restructuring with change in punitive action against the ownership or defaulting management Liquidation  Another fallacy is the claim by the managements of defaulting borrowers that the restructuring plan proposed by them will result in ‘zero haircut’ for banks; whereas, if banks file insolvency application, new investor would be willing to take over the defaulting entities only with ‘huge haircuts’ on debt.
Estonia recorded an inflation rate of 17.8% and Slovenia one of 9.4%. These are all-time-high inflation differentials within the euro area. Needless to say, these are figures which are uncomfortably high, for households, enterprises and, sovereigns alike.