Restructuring would force recapitalization of national bank systems, and could well force recapitalization of the ECB. It's hard to see how that goes down with

Restructuring would force recapitalization of national bank systems, and could well force recapitalization of the ECB. It's hard to see how that goes down without a German subsidy. That's probably fine as a one-off event, but of course this situation is basically writing the rules going forward. And a default / restructuring would also force reconsideration of the "risk-free" status afforded euro sovereign debt by the EBC and national regulators. Actually reflecting risk would introduce yield and liquidity differentials among euro sovereigns, with Germany essentially becoming the benchmark. Ignoring that risk would perpetuate the moral hazard temptations, and under a precedent of Germany underwriting the risks. So either the euro becomes the deutchesmark, or Germany underwrites the deficit risks of the euro countries. Not easy to see how that gets resolved.