Debt Restructuring and Economic Prospects in Greece
AbstractSevere recession in 2010–12 drove the need for sovereign debt reduction in Greece, despite a massive cut in government spending. The 2012 restructuring cut privately-held debt by about 50 percent, but much debt was exempt (IMF, euro area governments, ECB), and new borrowing was needed to recapitalize banks. In December an official sector package of lower interest rates, buybacks, and remittance of ECB profits on Greek bonds boosted total relief by about one third. Nonetheless, even under favorable conditions the ratio of debt to GDP is unlikely to be much below 120 percent by 2020, limiting market access for a country that has restructured with deep haircuts. Although Greek borrowing needs are now covered for several years, more relief from the official sector thus seems likely to be needed in the future.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Peterson Institute for International Economics in its series Policy Briefs with number PB13-3.
Date of creation: Feb 2013
Date of revision:
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Zsolt Darvas, 2012. "The Greek debt trap: an escape plan," Policy Contributions, Bruegel 759, Bruegel.
- William R. Cline, 2011. "Sustainability of Greek Public Debt," Policy Briefs, Peterson Institute for International Economics PB11-15, Peterson Institute for International Economics.
- William R. Cline, 2012. "Sovereign Debt Sustainability in Italy and Spain: A Probabilistic Approach," Working Paper Series, Peterson Institute for International Economics WP12-12, Peterson Institute for International Economics.
- David, Carfì & Daniele, SCHILIRO', 2014. "Improving competitiveness and trade balance of Greek economy: a coopetitive strategy model," MPRA Paper 55124, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peterson Institute webmaster).
If references are entirely missing, you can add them using this form.