Working Paper: CEPR ID: DP9577
Authors: Jeromin Zettelmeyer; Christoph Trebesch; Mitu Gulati
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: debt restructuring; eurozone crisis; financial crises; greece; sovereign debt; sovereign default
JEL Codes: F340
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Greek debt restructuring (H63) | transfer from private creditors to Greece (F34) |
| Greek debt restructuring (H63) | high participation rate in debt exchange (F34) |
| regulatory pressure on banks (G28) | high participation rate in debt exchange (F34) |
| Greek Bondholder Act (F34) | high participation rate in debt exchange (F34) |
| Greek debt restructuring (H63) | risks for European taxpayers (F34) |
| Greek debt restructuring (H63) | future complications in restructurings (G33) |