. . . The purpose of the euro is to facilitate trade and commerce – not facilitate government borrowing.
This, then, is the impasse euro zone bond investors have reached. To avoid losses, they clamor for alternatives that could disrupt the currency itself – one of the few things that might actually make them worse off in real terms than they are right now. A brave debtor country or two, backed against the wall, could save them from themselves. As Norman Bailey memorably said of the debt crisis of the 1980s, though, the bankers have no brains and the debtors have no balls.