Debt-for-equity swaps offer Greece a better way

Peter Allen, Barry Eichengreen, Gary Evans 28 February 2014

a

A

Last week, Eurogroup finance ministers in their wisdom decided that there would be no debt relief or restructuring for Greece until the end of the summer. Evidently they wish to avoid exciting voters in the European Parliament elections in May. This is regrettable, since it only puts off the inevitable and forces the Troika to use smoke and mirrors to fill the government’s funding gap.

a

A

Topics:  EU institutions International finance

Tags:  Greece, greek crisis, Greek debt, debt-equity swaps

Looking at Greece in the Argentinean mirror

Domingo Cavallo 15 July 2011

a

A

The Greece 2011-Argentina 2001 comparison has been worked hard since the Greek crisis emerged. The analogy is particularly popular with those who think Greece should abandon the euro as Argentina abandoned the dollar in January 2002. They argue that by transforming all existing contracts from euros into New Drachmas, Greece would recover monetary “sovereignty” and exchange-rate flexibility.

a

A

Topics:  Europe's nations and regions Financial markets

Tags:  greek crisis, orderly restructuring, Argentine crisis

The Eurozone crisis: What needs to be done

Guido Tabellini 15 July 2011

a

A

The financial crisis that is tearing Europe apart is caused in part by a misperception – the idea that financial market discipline can be relied upon to induce countries to balance their budgets. According to this leitmotiv, if a country were not forced to preserve the confidence of the markets, its incentives would be distorted; moral hazard would induce excessive debt accumulation.

This idea, which is certainly valid for private institutions, cannot be applied to the Eurozone countries. As long as this idea persists, it will be difficult to overcome the crisis.

a

A

Topics:  EU institutions Financial markets Global crisis

Tags:  Eurozone crisis, greek crisis, debt restructuring, European Sovereignty

A debt swap to save Greece and the euro

Avinash Persaud 18 May 2010

a

A

There is a simple way to resolve the Greek problem that will strengthen the euro, not undermine it, will lead international tax payers to recover the $145 billion they have pledged, not lose it, and will not require ambitious institution building in Europe at a time when the electorate is euro-fatigued. The solution requires three critical ingredients. So far we have seen much of two of them: an onerous Greek stabilisation package and the commitment to a very substantial package of fiscal support to Greece by European countries and the IMF.

a

A

Topics:  Financial markets

Tags:  Eurozone crisis, sovereign debt crisis, greek crisis, voluntary debt swaps

European Stabilisation Mechanism: Promises, realities and principles

Charles Wyplosz 12 May 2010

a

A

There is much to reflect on following the decisions taken over the last weekend. The most important ones are:

a

A

Topics:  EU institutions

Tags:  eurozone, sovereign debt crisis, greek crisis, European Stabilisation Mechanism

Greek lessons

Michael Burda, Stefan Gerlach 11 May 2010

a

A

The plan agreed last weekend in Brussels appears has been received positively by the markets. Unfortunately, it is too early to conclude that it was a success. Future monetary historians will judge whether it was a brilliant move by Eurozone governments which put an end to speculation or the first step down a slippery path to ruin.

a

A

Topics:  EU institutions

Tags:  eurozone, sovereign debt crisis, greek crisis, European Stabilisation Mechanism

Financial Stability beyond Greece: Making the most out of the European Stabilisation Mechanism

Daniel Gros, Thomas Mayer 11 May 2010

a

A

Reflecting on his experience with the multiple financial crises of the 1990s, then-Secretary of the Treasury Larry Summers wrote that policymakers facing a crisis tend to go through a process reminiscent of the five stages of grief (Summers 2000):

a

A

Topics:  EU institutions

Tags:  eurozone, sovereign debt crisis, greek crisis, European Stabilisation Mechanism

The ‘original sin’ in the Eurozone

Giancarlo Corsetti 09 May 2010

a

A

Among the main advantages of participating in the Eurozone – along with ruling out currency risk – is the fact that countries can issue debt in their own currency at reasonable prices, taking advantage of a large and thick market for euro-denominated bonds.

a

A

Topics:  Global crisis

Tags:  eurozone, sovereign debt crisis, greek crisis

It is not too late for Europe

Barry Eichengreen 07 May 2010

a

A

European leaders and the IMF have badly bungled their efforts to stabilise Europe’s financial markets. They have one last chance, but success will require a radical change in mindset.

First the easy part: Greece will restructure its debt. This point is no longer controversial; the only controversy is why a restructuring was not part of the initial IMF-EU rescue package.

a

A

Topics:  Global crisis

Tags:  eurozone, EU, sovereign debt crisis, greek crisis