Greece has been at the epicenter of the European debt crisis. It is the only industrial nation since the 1930s that has been forced to restructure public debt with forgiveness. Financial contagion from Greece contributed to debt stress in the euro area periphery, at fi rst in Ireland and Portugal but eventually even in the large and stronger economies of Italy and Spain, which encountered punitive risk spreads on sovereign debt by late 2011. By the second quarter of 2012 political turmoil in Greece and the temporary specter of a Greek exit from the euro, together with heightened banking problems in Spain, sparked another round of stress in debt markets. Th en at midyear the sharp escalation of potential European Central Bank (ECB) support through purchases of government bonds in Outright Market Transactions restored a measure of calm.