The 2012 Greek Retrofit and Borrowing Costs in the European Periphery

Patrick Bolton, Ugo Panizza, Mitu Gulati and Xuewen Fu
Additional contact information
Patrick Bolton: Columbia University GSB
Mitu Gulati: University of Virginia, Law School
Xuewen Fu: University College, London

No 13-2023, IHEID Working Papers from Economics Section, The Graduate Institute of International Studies

Abstract: This article examines the impact of Greece retroactively, via legislation, changing the terms in hundreds of billions of euros worth of Greek government bonds governed by domestic Greek law. As the abrogation of gold clauses in US government bonds by the US Congress in 1933 had been, the Greek action was decried as violative of the rule of law and sure to negatively impact the future ability of Euro area sovereigns to borrow. We test whether the Greek action had negative spillovers on European government debt markets. We find no evidence of increased borrowing for even the most peripheral European economies from the Greek action.

Pages: 37 pages
Date: 2023-08-14
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Working Paper: The 2012 Greek Retrofit and Borrowing Costs in the European Periphery (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:gii:giihei:heidwp13-2023

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