All sovereign debt restructurings are inherently messy, expensive, exasperating, time-consuming and contentious. These are the familiar pathologies in the international system to resolve unsustainable sovereign debts. But the period since the onset of the Covid-19 crisis has revealed (to use a term we all learned during pandemic lockdowns) several new co-morbidities. These include a breakdown in the ability of the major external creditor groups (traditional Paris Club lenders, non-Paris Club bilateral creditors like China and bondholders) to coordinate their debt relief efforts, the increasingly diverse nature of the private sector entities holding claims against a debtor state and the total absence of any mechanisms — statutory or contractual — that can be used to ensure that the sacrifices made by the vast majority of claimants and official sector sponsors in the economic recovery process cannot be exploited by the uncooperative few.

G. Mitu Gulati & Lee C. Buchheit, Avoiding a Lost Decade—An Interim Update, 39 Oxford Review of Economic Policy 356–359 (2023).