The Greek government bonds' haircut and the fall in the Greek current account deficit...

Greece’s current account deficit decreased significantly in 2012. That is valid both when expressed as a % of GDP as well as in absolute numbers. 

source: Eurostat

In this post I’m going to ignore all other factors leading to that and zoom in on the least lauded of them all, the fact that the income deficit plummeted.

source: Eurostat

Since I haven’t heard (or read at that) anywhere why that is the case, I’m going to take the long way round.

One of the components of the income account is, income on debt. I will focus on the debit side of the ledger here, so we are talking about interest paid on debt. 

source: Eurostat

As you can see from the chart above, the fall that the debit side of the income component recorded in 2012 corresponds to a fall in interest paid on debt.

This fall is an absolute match for another figure that is especially talked about in Greece the past few years, namely, interest paid on government debt.

source: Eurostat

It seems that the haircut/restructuring of Greek government bonds is one of the main reasons that account for the fall in the current account deficit.