THE ARCHITECTS of the Greek sovereign debt writedown are in Cyprus to present their positions on the eurozone debt crisis and the option of a possible debt writedown for Cyprus.
Dr Mitu Gulati and Lee C. Buchheit will be presenting their joint paper titled: ‘The eurozone debt crisis: the options now, with special reference to Cyprus’, tomorrow at the European University Cyprus Delta Auditorium at 11am until 1pm.
The two men were described last March by the New York Times (NYT) as the “intellectual fathers of Greece’s intricate bond swap” , noting that it was their joint paper in May 2010 that first proposed a way for Greece to force investors who reject a deal to suffer the same loss as those who agreed.
Gulati is Professor of Law at Duke University and was instrumental in highlighting the feasibility of a reduction of Greek debt through swaps, by suggesting that collective action clauses allowed enough negotiation room for debtors to come to a deal with their creditors.
Buchheit is a partner at Cleary Gottlieb Steen & Hamilton LLP and visiting professorial fellow in the Centre for Commercial Law Studies at the University of London.
He played a leading role in the team of lawyers who managed the new deals between investors and the Greek state and has been vital in providing leverage for indebted countries to compel holdout creditors into deals favourable for the debtor.
He has also been involved in debt restructuring deals in numerous countries in Latin America and more recently in Iraq and Iceland.
Last year, he was recognised by the Financial Times as one of the ten most ‘Innovative Individuals of 2012’ for his work on the Greek debt restructuring.
According to the NYT, both men see themselves as “sovereign debt taboo-busters”. And now both are in Cyprus to talk about what politicians and bankers across the board might consider the ‘nightmare scenario’- a sovereign debt haircut to make Cyprus’ public debt more sustainable post-bailout.
The fact that struggling local banks are in possession of a huge share of government bonds makes what they have to say all the more interesting.
Cyprus-based economist Fiona Mullen will also give a presentation after Gulati and Buchheit on who owns Cypriot debt and the repercussions of a Cypriot haircut.
Mullen, the director of Sapienta Economics, has been providing detailed reports on the economy of Cyprus for the past decade, and has written extensively about the existing Cypriot debt and the possible repercussions of its renegotiation.
The event is organised by the Department of Accounting, Finance and Economics of the European University Cyprus. For more information, contact the Events Office at 22713047 or email: [email protected].
