The Greek Debt Restructuring: An Autopsy

65 Pages Posted: 11 Sep 2012 Last revised: 25 Dec 2014

Jeromin Zettelmeyer

Peter G. Peterson Institute for International Economics; CEPR

Christoph Trebesch

Ludwig Maximilian University of Munich; CESifo (Center for Economic Studies and Ifo Institute)

G. Mitu Gulati

Duke University School of Law

Date Written: August 1, 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: sovereign debt, sovereign default, debt restructuring, financial crises, Eurozone crisis, Greece

JEL Classification: F34

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

Jeromin Zettelmeyer (Contact Author)

Peter G. Peterson Institute for International Economics ( email )

1750 Massachusetts Avenue, NW
Washington, DC 20036
United States

CEPR ( email )

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

Christoph Trebesch

Ludwig Maximilian University of Munich ( email )

Schackstr. 4
Munich, 80539
Germany

HOME PAGE: http://https://sites.google.com/site/christophtrebesch/

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Gaurang Mitu Gulati

Duke University School of Law ( email )

210 Science Drive
Box 90362
Durham, NC 27708
United States

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