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The 2012 private sector involvement in Greece

Discussion Papers
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Download PDF: Discussion Paper 11


Author: Gong Cheng (Bank for International Settlements)

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.


Disclaimer: This Discussion Paper was drawn up by the author(s) as part of the evaluation of financial assistance to Greece. To fully protect the independent nature of the evaluation and in line with its Terms of Reference, this Discussion Paper has not been subject to scrutiny or review by ESM management. The views expressed in this paper do not necessarily represent those of the BIS, the ESM, or their policies. The author completed this work while he was working as a senior economist at the ESM.

Source: European Stability Mechanism | Discussion Paper Series | Volume 2020 (Programme evaluation II special) no. 11 | June 2020 | 31 Pages


Copyright © European Stability Mechanism, 2020 | All rights reserved. Any reproduction, publication and reprint in the form of a different publication, whether printed or produced electronically, in whole or in part, is permitted only with the explicit written authorisation of the European Stability Mechanism.