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The 2012 private sector involvement in Greece

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  • Gong Cheng

    (Bank for International Settlements)

Abstract

In March 2012, the euro area agreed a private sector involvement (PSI) to alleviate Greece’s debt burden by restructuring sovereign bonds held by private investors. This background paper provides information on the restructuring arrangements and examines the macroeconomic and financial implications on Greece’s fiscal sustainability and its later assistance programmes. Throughout 2019, European Stability Mechanism (ESM) researchers interviewed participants to evaluate the ESM’s performance in its financial assistance to Greece and to learn lessons about the PSI procedure itself. This paper also outlines lessons learned that could apply to handling any future euro area debt restructuring.

Suggested Citation

  • Gong Cheng, 2020. "The 2012 private sector involvement in Greece," Discussion Papers 11, European Stability Mechanism, revised 25 Oct 2021.
    • Handle: RePEc:stm:dpaper:11
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    References listed on IDEAS

    as
    1. Christoph Trebesch & Jeromin Zettelmeyer, 2018. "ECB Interventions in Distressed Sovereign Debt Markets: The Case of Greek Bonds," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 66(2), pages 287-332, June.
    2. Jochen Andritzky & Désirée I. Christofzik & Lars P. Feld & Uwe Scheuering, 2019. "A mechanism to regulate sovereign debt restructuring in the euro area," International Finance, Wiley Blackwell, vol. 22(1), pages 20-34, May.
    3. Jeromin Zettelmeyer & Christoph Trebesch & Mitu Gulati, 2013. "The Greek debt restructuring: an autopsy [Greek bond buyback boondoggle]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 28(75), pages 513-563.
    4. Gong Cheng & Dominika Miernik & Teuta Turani, 2020. "Finding complementarities in IMF and RFA toolkits," Discussion Papers 8, European Stability Mechanism, revised 25 Oct 2021.
    5. Tamon Asonuma & Michael G. Papaioannou & Eriko Togo & Bert van Selm, 2020. "Belize’s 2016–17 Sovereign Debt Restructuring – Third Time Lucky?," Journal of Banking and Financial Economics, University of Warsaw, Faculty of Management, vol. 2(14), pages 47-67, December.
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