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. 

 

 

 

Citation
G. Mitu Gulati, Christoph Trebesch & Jeromin Zettelmeyer, The Greek Debt Restructuring: An Autopsy, 28 Economic Policy 513–563 (2013).