Banks with outstanding Greek debts are to write off half the debts owed to them. Fine. That is what's normally known as a default, although that term is not the one being used on news channels. The debts, however, will keep growing until the economy can start growing. With the interest bill reduced somewhat, the deficit is still 8/9% GDP per annum. Taxes need to be raised and spending cut further, fanning the flames of the violence on the street. Only when the currency gets out of the Euro, and the currency takes the hit it needs to make Greece competitive once more will the economy be able to get back into growth.
Portugal is only months behind Greece on a similar trajectory.
As for the banks taking the hit, these are presumably all backed up by other European governments themselves already running growing and unsustainable deficits. The market and media celebrations of the last two days are simply nuts. But what the hell! The whole situation is nuts anyway!
Keeping the PIGS inside a prison. Good money after bad.
(TAP - The IMF is not an American institution).
Cameron has no backbone or spine at all.
The markets will overwhelm the Euro. The size of the bailout makes no difference.
Greece needs her currency to fall by 60-70%.