Calls for immediate debt restructuring went unheeded.

Of course, a breakup now would be very costly, requiring an international debt conference to restructure the periphery s debts and the core s claims.

Indeed, the implementation of the Multilateral Debt Relief initiated by the G 8 already provides an unprecedented opportunity to complete the process of debt relief for a large number of low income countries.

It sometimes seems that the only eurozone leader who is willing to face the likely prospect of future debt restructuring is German Chancellor Angela Merkel.

But as debts mount, and global interest rates rise, investors will become rightly nervous about the risk of debt restructuring.

Unsustainable private debt problems must be resolved by defaults, debt reductions, and conversion of debt into equity.

Seen in these terms, it is clear why the German government s proposed debt restructuring mechanism immediately shifts weaker eurozone countries towards default. As Chancellor Angela Merkel and her colleagues promote their well defined plan which comes in addition to a plan for bridge financing while in default the cost of default falls.

The Debt Death Trap

Alternatives to a debt restructuring are fast disappearing.

Initial conditions matter in economic restructuring

The Lethal Deferral of Greek Debt Restructuring

Our Deep Debt Future

He has a lot of debts.

Tom has a lot of debts.

In an ideal world, Europe would deal with its excessive debt burdens through a restructuring of Greek, Irish, and Portuguese liabilities, as well as municipal and bank debt in Spain.

Waiting to restructure unsustainable debts would only lead to disorderly workouts and severe haircuts for some private creditors.

The only alternative is to shift quickly to Plan B an orderly restructuring and reduction of the debts of these countries governments, households, and banks.

I don't have any debt.

The international community has, so far, failed to develop effective and equitable arrangements for restructuring sovereign debt, despite the clearly dysfunctional and problematic consequences of past international public debt crises.

So plan B, always a plan B.

Its rebirth was underway, facilitated by the Marshall Plan, the US sponsored 1953 debt write down, and by the infusion of migrant labor from Italy, Yugoslavia, and Greece.

A country drowning in debt needs debt restructuring.

No more debts and stupid 'investments'! .

They still have many outstanding debts.

The plan is under discussion.

What's the plan?

Here's the plan.

Here's the plan.

That's the plan.

The plan was a success.

The plan is working.

The plan has failed.

That's a great plan.

It's not a bad plan.

Will the plan work?

This is the plan.

That is the plan.

Sovereign debts have been restructured hundreds, perhaps thousands, of times including for Germany.

I like Tom's plan better than Mary's plan.

The very mention of debt restructuring was considered inadmissible and a cause for ridiculing those of us who dared suggest its inevitability.

More importantly, through its numerous rescues of sovereign states, the IMF has acquired expertise in debt restructuring, while developing a reputation for toughness and impartiality, which would be very useful in these situations.

Markets long ago stopped buying bonds issued by Greece, Ireland, and Portugal, and might soon stop buying paper issued by Italy and Spain or do so only at prohibitive interest rates.

What Europe and the IMF have essentially done is to convert a private debt problem into a sovereign debt problem.

The five countries in trouble will need to place tens of billions of euros in new debt and roll over even larger amounts of old debt.

But, as we know from experience, there is life after debt restructuring.