Debt Reduction without Default
Debt Reduction without Default

Author(s): Daniel Gros, Thomas Mayer
Subject(s): Economic policy, EU-Accession / EU-DEvelopment, Financial Markets, Fiscal Politics / Budgeting
Published by: CEPS Centre for European Policy Studies
Keywords: EU; euro-zone; Greece; debt reduction; economic policy; reforms; EFSF;
Summary/Abstract: The government of Greece continues to have difficulties implementing the promises it gave to its creditors and convincing its own population that ‘there is no alternative’ to further rounds of tough cuts and reforms. Moreover, investors are now convinced that the country will not be able to grow out of its public debt, which is now on course to top 160% of a shrinking GDP. Bond prices have fallen to between 35-45% of their face value.

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