Isn’t this exactly what is supposed to happen:
Ireland has finally taken its medicine, accepting the financial rescue package European officials have been pushing for several weeks.
But even as Europe moved to avert this latest debt crisis, economists and policy experts are increasingly debating whether it would be better, and fairer, for the Continent’s weakest economies to default on payments to lenders.
Many experts now say that bailouts only delay the inevitable. Instead of further wounding their economies with drastic budget slashing, the specialists assert, governments should immediately start talks with bondholders and force them to accept a loss on their investments.
Aren’t the bondholders supposed to take a bath when their investment turns out to have been utter shit? What am I not understanding? Where did this notion that there is never, ever any risk for bondholders come from?