The Greek debt restructuring: an autopsy

The Greek debt restructuring: an autopsy

The Greek debt restructuring of 2012 stands out in the history of sovereign defaults. It achieved very large debt relief – over 50% of 2012 GDP – with minimal financial disruption, using a combination of new legal techniques, exceptionally large cash incentives, and official sector pressure on key c...

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Bibliographic Details
Published in:Economic policy Vol. 28; no. 75; pp. 513 - 563
Main Authors: Zettelmeyer, Jeromin, Trebesch, Christoph, Gulati, Mitu, Monacelli, Tommaso, Whelan, Karl
Format: Journal Article
Language:English
Published: Oxford Blackwell Publishing 01-07-2013
Oxford University Press
Subjects:
Autopsy
Cost
Credit
Debt
Debt management
Debt relief
Debt rescheduling
Debt restructuring
Default
Economic policy
Economic theory
Europe
Greece
Greeks
History
Monetary policy
Money
Risk
Sovereign debt
Taxpayers
Greece
Europe
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Summary:The Greek debt restructuring of 2012 stands out in the history of sovereign defaults. It achieved very large debt relief – over 50% 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.
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ISSN:0266-4658
1468-0327
DOI:10.1111/1468-0327.12014