What happens if Greek debts are written down?

The Greek government owes the European Stability Facility €40bn and €150bn to the ECB and various European central banks. All these institutions are funded or guaranteed by European countries’ governments. If there were a 100% write off of Greek government debts, these institutions would need recapitalising. Various European member states would then probably have to issue bonds. One country’s debts would simply become other countries’ debts.

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