The Greek debt restructuring: An autopsy — Peterson Institute for International Economics

Claims

1. greek-haircut-59-65-not-75
   Creditors' average present-value haircuts in the Greek exchange were about 59 to 65 percent depending on methodology, lower than the 75 percent widely reported in the financial press at the time, and losses were unevenly spread: 75 percent or more on bonds maturing within a year and under 50 percent on bonds maturing after 2025.

   "the “haircuts” suffered by creditors on average were considerably lower than the 75 percent widely reported in the financial press at the time of the debt exchange, namely, in the order of 59-65 percent, depending on which methodology is applied."

   Locator: section: 1. Introduction · Quote language: en
2. greek-relief-over-50-pct-gdp
   The 2012 Greek restructuring achieved debt relief of over 50 percent of 2012 GDP with minimal financial disruption, but the authors argue its timing and design left money on the table for Greece and set precedents, notably generous treatment of holdout creditors, likely to make future European restructurings harder.

   "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."

   Locator: section: Abstract · Quote language: en