The Germans will do anything before they will let the Greeks default — except back their loans, which is probably the only thing that will work. The leaders of Germany and the EU know this and thus they are trying to conduct a three-ring circus to distract the bond ratings agencies and the public NOT to notice that Greece is about to commit the D word.
It looks good to have Greece meet with its creditors in Rome.Thus it was arranged for them to do so. But of course it was all for show. If you don’t have the money, no amount of hocus-pocus will give it to you.
On Sunday, July 3 the EU leaders have scheduled a meeting to discuss the new Greek bailout before the previous one has even been ironed out. And here they get very tricky. They talk about how holders of rollver bonds will get higher inerest rates if Greece’s economy does well. But then they say that such bonds won’t be managed by the banks — heavens no! it would besmirch their honor! — instead they will be managed by a special purpose vehicle, not the banks. In fact, the bonds wouldn’t even appear on the balance sheets of said banks. They would be rolled over but not called in.
Before they accomplish all this, the Germans might as well be performing the miracle of the fishes and the loaves or even walking on water. It might be easier, a lot more honest, and a lot more believable.