The French have come up with a solution for the Greek debt problem! They're going to create a Special Purpose Vehicle ( no, I'm not kidding.) Here's how it works. Bondholders actually get about 30% of what they're due at maturity. The rest is voluntarily rolled over into 20 and 30 year bonds. Here's the good part. The banks, who were the bondholders don't have to carry the new Greek bonds on their books. Instead, the new SPV will own the bonds and the banks will own shares of the SPV. Hmmmm, where have we seen this scheme before?
The beauty is, when the EU has to cover the bonds in the future, they won't be bailing out Greece, or the banks, they'll be bailing out this SPV. I guess they think that will be more politically palatable to EU taxpayers.
Let's review. To deal with toxic assets, bundle, distribute, insure, bail, repeat.