The Greek Debt Restructuring: An Autopsy
European Bank for Reconstruction and Development; CEPR; Peter G. Peterson Institute for International Economics
Ludwig-Maximilians-Universität München; CESifo (Center for Economic Studies and Ifo Institute)
G. Mitu Gulati
Duke University School of Law
August 1, 2013
Peterson Institute for International Economics Working Paper No. 2013-13-8
The Greek debt restructuring of 2012 stands out in the history of sovereign defaults. It achieved very large debt relief – over 50 per cent of 2012 GDP – with minimal financial disruption, using a combination of new legal techniques, exceptionally large cash incentives, and official sector pressure on key creditors. But it did so at a cost. The timing and design of the restructuring left money on the table from the perspective of Greece, created a large risk for European taxpayers, and set precedents – particularly in its very generous treatment of holdout creditors – that are likely to make future debt restructurings in Europe more difficult.
Number of Pages in PDF File: 65
Keywords: sovereign debt, sovereign default, debt restructuring, financial crises, Eurozone crisis, Greece
JEL Classification: F34
Date posted: September 11, 2012 ; Last revised: December 25, 2014
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