Germany wants to involve private investors in the Greek bailout plan. They say they support the French plan to rollover 30 billion euros into the new Greek bonds so the countries involved and the IMF would have to pay less. At least that’s what they say now. They know very well that it won’t work in the long run. But for now they have to keep up the show to satisfy German taxpayers.
This is already being perceived as a “selective default”. It affects some of the investors’ bonds. It would leave the bond holders worse off than before.This means that everybody will have to go back to the drawing board and come up with a new bailout plan. Sovereign debt within the EU cannot be allowed to default. That would adversely affect the currency. Investors wouldn’t take it seriously.
Germany knows all these things. But now they’re on vacation Hopefully so are the taxpayers. They have until September.