Greece did force some foreigners and locals to take "hair cuts" on some of their bond investments, but this was done in a more complicated fashion than described by Antonopoulos, namely:
to minimize the number of holdout creditors in the Greek debt restructuring [...] Parliament enacted what amounted to a class voting mechanism covering all Greek law‐governed GGBs [Greek Government Bonds] (representing roughly 93 per cent of the total debt stock). That mechanism specified that if holders of two‐thirds of the Greek law‐governed GGBs approved a restructuring proposal, the result would bind all holders of those bonds.
And while this did not go unchallenged, it was ultimately successful:
The validity of this action by the Greek Parliament was subsequently challenged in lawsuits in Greek, German and Austrian courts, in a major International Centre for Settlement of Investment Disputes (ICSID) arbitration, and in a complaint filed with the European Court of Human Rights (Grund, 2017). None of these legal challenges to the validity of Parliament's action has succeeded.
The most important of these precedents for future sovereign debt restructurings in Europe is likely to be the June 2016 decision of the European Court of Human Rights in a case captioned Mamatas and Others v. Hellenic Republic. [...] The lessons that may be drawn from the Mamatas precedent for any future debt restructuring by a Eurozone member are:
- Only a severe financial crisis will justify an extraordinary action such as a legislatively‐imposed class voting mechanism.
- The member concerned would be well advised to follow the Greek path of allowing a supermajority of affected creditors to control the process, rather than attempt a direct legislative write down of the debts.
- Using a debt restructuring technique that resembles the operation of the now‐mandatory collective action clauses in Eurozone sovereign bonds will help deflect a claim that creditor expectations have been traumatized.
For a bit more background from Grund, as to what led to this:
After teetering on the verge of insolvency for two years, Greece implemented the biggest sovereign debt restructuring in history, swapping private bonds with a face value of roughly €205 billion. The technique applied by the Greek government to facilitate this gigantic debt restructuring was both simple and ingenious.
As proposed in a seminal paper by Buchheit and Gulati (2010), the Greek government exploited the fact that the bulk of Greek debt (roughly 86% of privately-held securities) was issued under Greek law. Thus, instead of outright repudiating its debts like, for instance, Argentina, the Greek Parliament retroactively inserted collective action clauses (‘CACs’) into Greek bonds by virtue of legislation. CACs – which are standard in most emerging-market bond issuances – enable a (super-)majority of investors to approve a restructuring deal against a minority of uncooperative hold-outs, thereby substantially increasing the overall participation threshold. However, the Greek ‘Retrofit’ was highly contentious. Thousands of disgruntled bondholders were ‘crammed down’ by big institutional investors, and filed suits in courts across different jurisdictions demanding compensation for the losses suffered.
Also of note, while these decisions affected some private bond-holders, most of Greece's sovereign debt was held by EFSF by that point. The EFSF/ESM has this brief (2012) press release:
Also known as the PSI (private sector involvement) or private sector haircut, it was a restructuring of Greek debt held by private investors (mainly banks) in March 2012 to lighten Greece’s overall debt burden. About 97% of privately held Greek bonds (about €197 billion) took a 53.5% cut of the face value (principal) of the bond, corresponding to an approximately €107 billion reduction in Greece’s debt stock.
The EFSF encouraged bondholders to participate in the restructuring. It provided EFSF bonds as part of two facilities to Greece. These were the:
PSI facility – as part of the voluntary debt exchange, Greece offered investors 1- and 2-year EFSF bonds. These EFSF bonds, provided to holders of bonds under Greek law, were subsequently rolled over into longer maturities.
Bond interest (accrued interest) facility – to enable Greece to repay accrued interest on outstanding Greek sovereign bonds under Greek law which were included in the PSI. Greece offered investors EFSF 6-month bills. The bills were subsequently rolled over into longer maturities.
Now Greece did "haircut" their "average citizen", but in other ways (not their bank deposits), e.g. pensions were cut or at least frozen, which is frankly more relevant as most Greek citizens didn't have large bank deposits (or bond holdings). By 2015,
since 2010 public and private sector pensions have been severely pruned, on a scale ranging from a 15%-cut for the very lowest (under €500 a month) to as much as 44% for highest (more than €3,000).
The pensions (apparently) were restored in 2018. I haven't followed the full story on that.
So yeah, Greece did some "haircuts", but not those described by Antonopoulos (i.e. not to bank deposits), but rather to pensions and to bond-holders.
