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http://hdl.handle.net/10419/55304
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| Title: | | Ramifications of debt restructuring on the euro area: The example of large European economies' exposure to Greece  |
| Authors: | | Belke, Ansgar Dreger, Christian |
| Issue Date: | | 2011 |
| Series/Report no.: | | Discussion papers // German Institute for Economic Research 1141 |
| Abstract: | | 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 potential 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. |
| Subjects: | | euro area debt crisis debt conversation Greece |
| JEL: | | F33 F34 H63 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Publikationen von Forscherinnen und Forschern des DIW DIW-Diskussionspapiere
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