The Greek Debt Restructuring: An Autopsy

68 Pages Posted: 31 Jul 2013

See all articles by Mitu Gulati

Mitu Gulati

University of Virginia School of Law

Christoph Trebesch

Kiel Institute for the World Economy; Centre for Economic Policy Research (CEPR)

Jeromin Zettelmeyer

European Bank for Reconstruction and Development (EBRD)

Date Written: July 2013

Abstract

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.

Keywords: debt restructuring, Eurozone crisis, financial crises, Greece, sovereign debt, sovereign default

JEL Classification: F340

Suggested Citation

Gulati, Mitu and Trebesch, Christoph and Zettelmeyer, Jeromin, The Greek Debt Restructuring: An Autopsy (July 2013). CEPR Discussion Paper No. DP9577, Available at SSRN: https://ssrn.com/abstract=2304081

Mitu Gulati (Contact Author)

University of Virginia School of Law ( email )

580 Massie Road
Charlottesville, VA 22903
United States

Christoph Trebesch

Kiel Institute for the World Economy ( email )

P.O. Box 4309
Kiel, Schleswig-Hosltein D-24100
Germany

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Jeromin Zettelmeyer

European Bank for Reconstruction and Development (EBRD) ( email )

One Exchange Square
London, EC2A 2EH
United Kingdom

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