The Greek Debt Restructuring: An Autopsy
65 Pages Posted: 15 Aug 2013
Date Written: August 14, 2013
The Greek debt restructuring of 2012 stands out in the history of sovereign defaults. It achieved very large debt relief — over 50 percent 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
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