The Greek Debt Restructuring: An Autopsy

66 Pages Posted: 19 Jul 2013

See all articles by Jeromin Zettelmeyer

Jeromin Zettelmeyer

European Bank for Reconstruction and Development (EBRD)

Christoph Trebesch

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

G. Mitu Gulati

Duke University School of Law

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Date Written: July 18, 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, crisis resolution, Greece

JEL Classification: F340

Suggested Citation

Zettelmeyer, Jeromin and Trebesch, Christoph and Gulati, Gaurang Mitu, The Greek Debt Restructuring: An Autopsy (July 18, 2013). CESifo Working Paper Series No. 4333. Available at SSRN: https://ssrn.com/abstract=2295384

Jeromin Zettelmeyer

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

One Exchange Square
London, EC2A 2EH
United Kingdom

Christoph Trebesch (Contact Author)

Kiel Institute for the World Economy ( email )

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

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Gaurang Mitu Gulati

Duke University School of Law ( email )

210 Science Drive
Box 90362
Durham, NC 27708
United States

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