INTERNATIONAL POLICY ANALYSIS One Made it Out of the Debt Trap Lessons from the London Debt Agreement of 1953 for Current Debt Crises JÜRGEN KAISER June 2013 n Among modern sovereign debt restructurings, the little-known London Debt Agree­ment for Germany is an early and important example – not least, because it was so successful in restoring West Germany’s debt sustainability. n Beyond the sheer level of relief it provided, the London Debt Agreement shows some»qualitative« dimensions, the lack of which makes present-day restructurings so protracted and painful. They include a conditioning of debt service upon trade surpluses, the possible recourse to arbitration, and the comprehensive character of the negotiation, which included most types of claims on the German economy. n Comparing the London Debt Agreement to recent restructurings in Greece, Iraq, and Burundi demonstrates how overall, and in important details, a»London-style« process would have delivered – or still could deliver – faster and more sustainable debt restructuring.