EU Said to Consider One-Time 50% Greek Writedown, Bank Backstop

Bloomberg reports:

European officials are considering writedowns of as much as 50 percent on Greek bonds, a backstop for banks and continued central bank bond purchases as key planks in a revamped strategy to combat the debt crisis, people familiar with the discussions said.

The Greek bond losses may be accompanied by a pledge to rule out debt restructurings in other countries that received bailouts, such as Portugal, to persuade investors that Europe has mastered the crisis.

Bottom line: They are going to sink the Greeks and protect everyone else. I have been reporting this in the EPJ Daily Alert for more than a week:

The specifics of the EZ rescue are still in the making, but from what I picked up on the sidelines of the World Ideas Forum (where Geithner spoke), it will probably result in Greece going into a controlled default, while the other PIIGS are protected by a firewall, whereby all the liabilities of other PIIGS banks will be guaranteed by some European entity.

Consider this done.