The 2012 Greek debt restructuring was a watershed event in the European debt crisis. It was unprecedented in terms of its size and deep haircut, yet it took place in an orderly manner, with the consent of both private and official creditors. There is an ongoing debate as to whether it should have happened sooner to avoid bailing out private investors with public money. In line with the book’s subtitle, this paper discusses the tradeoff between the need to ensure debt sustainability up front versus the fear of contagion, concerns about euro area bank solvency, and doubts about Greece’s resolve to reform.