The Greek debt restructuring: An autopsy

Abstract

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. © CEPR, CES, MSH, 2013.