The Greek haircut

How big will the Greek default be? Seems like EU leaders finally reached a deal with Greek bondholders. The latter will lose 50% of the face value of their bonds (see FT). Is this a big deal? Well, according to the graph below taken from a Vox column by Cruces and Trebesch, it's definitely a bigger than average haircut. Needless to say, a bad haircut is not forgotten quickly. As Cruces and Trebesch write: "Higher haircuts are strongly associated with higher borrowing costs after debt crises, and longer periods of market exclusion". But Greece is in the EU, so things might not be so bad...