Author(s): Patrício, Artur Manuel de Carvalho
Date: 2014
Persistent ID: http://hdl.handle.net/10400.5/6630
Origin: Repositório da UTL
Subject(s): Portuguese public debt; debt restructuring; reducing interest rates; lengthening maturities; perpetual debt conversion; haircut; present value; debt service; debt dynamics
Mestrado em Finanças
Portuguese public debt has attained an unsustainable trajectory in recent years. The eco-nomic downturn and a fiscal imbalance have contributed to this situation. The aim of this research is to explore the possibility of restructuring sovereign debt as an alternative policy for solving the country’s debt problem. It is not easy to answer the question as to which hypothesis is the best solution for solving the Portuguese public debt problem. Reducing interest rates, lengthening maturities and perpetual debt conversion, seem to be the most feasible ones. However the haircut strategy should not be disregarded. The empirical analysis shows the impact of each hypothesis in three different frameworks: present value, debt service and debt dynamics.
