65 Pages Posted: 11 Sep 2012 Last revised: 25 Dec 2014
Date Written: August 1, 2013
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: sovereign debt, sovereign default, debt restructuring, financial crises, Eurozone crisis, Greece
JEL Classification: F34
Suggested Citation: Suggested Citation
Zettelmeyer, Jeromin and Trebesch, Christoph and Gulati, G. Mitu, The Greek Debt Restructuring: An Autopsy (August 1, 2013). Peterson Institute for International Economics Working Paper No. 2013-13-8. Available at SSRN: https://ssrn.com/abstract=2144932 or http://dx.doi.org/10.2139/ssrn.2144932
By Cullen Roche