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Working Paper 13-8

The Greek Debt Restructuring: An Autopsy

by Jeromin Zettelmeyer, Peterson Institute for International Economics
and Christoph Trebesch, University of Munich
and Mitu Gulati, Duke University

August 2013

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The Greek debt restructuring of 2012 stands out in the history of sovereign defaults. It achieved very large debt relief—over 50 percent 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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