So from what we are being told, and for what that may be worth, it looks as if ultimately the infamous Frau inspired ‘orderly’ default by Greece will not be as orderly as designed. We are being told that we will not attain the 90% ‘involvement’ necessary but something closer to the 75% which means, we are told again, that the CACs will have to be activated in which case this will no longer be a ‘voluntary’ deal.
Now what does that mean? Surely all those who have invested in Credit Default Swaps on Greek debt will demand their pound of flesh. However, Oli Rehn the Commissioner for all this mess says ‘that is something we do not want’. But it’s not up to him, is it? So how will this work? Law suits, long drawn out haggling? More mess added to the one already created?
And what about ‘others’ deciding they need a haircut too? It could happen.
And in any case, none of this, however it is set to play out, will do anything to help solve the Greek and consequently the European crisis. Already rumours going around that the German Minister of Finances Schauble has suggested that perhaps Greece might be better off if it left the Euro (and that would go a long way to explain the excruciating austerity punishment being meted out to Greece instead of anything remotely resembling growth.)
In any case, if anyone imagines that this hair brained PSI scheme, however it plays out, will do anything to help solve the Euro crisis, they are quite mistaken. This is merely splashing more oil on the raging fire.