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Working Paper 19-8: How to Restructure Sovereign Debt

How can we reduce sovereign debt?
Maintaining interest rates at low levels can help stimulate the economy, generate tax revenue, and, ultimately, reduce the national debt.
Lower interest rates make it easier for individuals and businesses to borrow money for goods and services, which creates jobs and increases tax revenues.
What are the methods of debt restructuring?
Types of debt restructuring
Loan modification.Payment deferral.Extending the loan term.Adjusting the balance due.Waiving penalty fees that have already been added.Reducing the interest rate.
What is the common framework for sovereign debt restructuring?
Sovereign debt restructuring is essentially a zero-sum game of allocating the burden of a haircut among different creditor groups.
Under the Common Framework, a debtor country would first request debt relief from official bilateral lenders before seeking treatment at least as favorable from its private creditors.
Here are the following steps: 1) determine what your total debt payment is now 2) sort your debts from highest interest rate to lowest 3) continue to make the same total payment amount except pay minimum payments on all debts with the exception of paying as much possible toward the highest rate debt, then 4) once the

How can we reduce sovereign debt?