With Europe’s leaders locked in debate over what to do next, IFLR takes a look at the complex rules of redenomination that are set to determine the future of the world’s second biggest currency in the coming weeks.
Here are the eight principles that, according to Philip Wood of Allen & Overy, are the main points clients should address when examining the risks of a country leaving the eurozone.
1. The first rule applies if the only available courts are local. In this case, regardless of governing law, these courts will have jurisdiction. They will apply the local redenomination and exchange controls.
2. Second on the list is where there are foreign courts, but local law – a local law bond for example (most Greek bonds are local law). In this case, the national government can change the law and this will be recognised by most countries.