Document Type


Publication Date



sovereign debt, Greece, creditors, sovereign bonds, CACs, Collective Action Clause, Eurozone, debt restructuring, default, risk, bondholders, debt relief


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.


This is a previous version of the working paper published by the Peterson Institute and later presented as a book chapter and an article.

Previous Versions

copyright issues (withdrawn)

Library of Congress Subject Headings

Debt relief, Debtor and creditor, Government bonds, Eurozone, Public debts, Risk, Greece, Default (Finance), Bondholders