Ramifications of debt restructuring on the euro area: The example of large European economies΄ exposure to Greece

Arbeitspapier

The Greek government budget situation plays a central role in the debt crisis in the euro area. The debt to GDP ratio is above 150 percent, while the deficit to GDP ratio exceeds 10 percent. To re-establish the Maastricht criteria, respectively, strong consolidation measures need to be implemented, with potential adverse effects on the Greek economy, and further credit requirements. Therefore, a debt conversion might become a reasonable alternative. The aim of this paper is to provide some simulation-based calculations on the expected fiscal costs for the governments in the large European countries Germany, France, Spain and Italy arising from different policy options - among them a second Greek rescue package. Under realistic conditions, a debt conversion may be the less costly strategy for Greece and the euro area partner states. A value-added of these calculations lies in a potential transfer to smaller euro area member countries.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ROME Discussion Paper Series ; No. 11-04

Classification and Topics

• Classification: Wirtschaft ; International Monetary Arrangements and Institutions ; International Lending and Debt Problems ; National Debt; Debt Management; Sovereign Debt
• Subject: Euro area debt crisis ; debt conversation ; Greece

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Belke, Ansgar ; Dreger, Christian
• Event: Veröffentlichung
• (who): Research On Money in the Economy (ROME)
• (where): s.l.
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/88205
• Last update: 10.03.2025, 11:43 AM CET