European leaders drop calls for bondholder write-offs

European leaders have abandoned plans for bondholders to bear the brunt of sovereign debt collapses, following talks overnight to tackle the eurozone crisis.

According to Bloomberg, Germany has scrapped its call to involve bondholders in the event of a re-structure of a country's sovereign debt. Leaders agreed to limit private-sector involvement to the terms accepted in International Monetary Fund bailouts. "As regards private-sector involvement, we have made a major change in our doctrine: from now on we will strictly adhere to the IMF principles and doctrines," EU President Herman Van Rompuy reportedly said at a briefing. "Or, to put it more bluntly, our first approach to PSI, which had a very negative effect on debt markets, is now o...