The much touted 50% haircut is for privately held debt only. Since most Greek bonds are with public institutions including the ECB which holds a big chunk, that's more like a 20% debt reduction which does nothing for Greece other then destroy its banks. The EU statement was a lovely example of Orwellian double speak: The expanded EFSF is guaranteed by all member states including those needing bailouts.... Unfortunately there is still no creditable backstop to halt the European crisis.

Austerity alone is not working for Greece. I live here and I see all around me people being squeezed to death. Bartering groups are springing up all over the country spontaneously as people try to cope with job losses, pension cuts and increased taxes. But there are no plans or projects to encourage economic growth even at a modest grassroots level. A 50% debt reduction supposes reducing Greece's debt to 120% of GDP by 2020 (supposedly good) but these calculations are based on a growing economy....