Grease Greece Bonds

Alternative for Greece to engage a limited bankruptcy, and limit the negative effect on the Euro
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Grease Bond definition: a bond that has defaulted, and the issuer promises to return back over time only the principle.

Possible avenue for Greece to handle its debt, is to convert Greek Government bonds into Grease bonds --- turning issued government debt into a smaller annuity, refunding only the principle, in a series of payments.

Immediate loss to investors in Greece bonds, but at least the grease bonds are worth fifty or more cents on the dollar. [Principle to be eventually be returned, should always be honoured in a government chapter 11. Thee policy of always returning at least the principle lent over time, protects against a debt spiral sinking the entire credit market in chaos. ]

Because Grease bonds do pay something -- the principle back over time, the bonds do have value, therefore can be traded. Bonus for latter grease bond holders is that when the principle is repaid, the nation can extend the time series and amount paid, to honour inflation and some of the forgone interest costs.

European Union guarantees grease bonds, would help. Euro value increases with an effective grease bond policy for defaulting nations, as default reduces Euro obligations. Short run creates economic crisis (already an economic crisis though, as Greece government budget no workable), long run grease bonds stabilize, and provide hope to balance a government's budget. Note, European Union can fund the grease principle payments partly, reduces pressure of Greece's books. Rudimentary economics, a government must have balanced books over time.