GEG Welcomes Jeromin Zettelmeyer for Discussion of Sovereign Debt Restructuring

In the wake of the Eurozone crisis and potential new turmoil in emerging markets, the issue of sovereign debt restructuring is once again making its way onto the global agenda. At present sovereign debt restructurings are handled on a case-by-case basis through ad hoc negotiations and emergency meetings, creating uncertainty and inefficiency around sovereign bankruptcies. Options for a new legally and politically recognised standard procedure for restructuring sovereign debt are currently being debated both within and outside the IMF.

On 24 February, GEG hosted a private roundtable on the future of sovereign debt restructuring. The discussion featured a presentation from Jeromin Zettelmeyer, Deputy Chief Economist of the European Bank for Reconstruction and Development and co-author of a recent high-level report on sovereign bankruptcy, and comments from Brett House, CIGI Senior Fellow and co-author of a report calling for the creation of a Sovereign Debt Forum. During the subsequent discussion, participants debated whether Greece’s restructuring was a special case or if its experience suggested more broadly-applicable lessons; how access to investor-state arbitration (through bilateral investment treaties) affects lenders’ incentives to participate in debt restructuring; and what was the best political strategy for overcoming opposition to reform.