No-one is particularly eager to bail out the Greeks. Of course everyone would like to prevent another major financial crisis but the idea of pumping money into a country that has so obviously lived beyond its means while providing incorrect information and conniving with banks to cover its tracks is hard to swallow. Even under the most generous of circumstances, such an action would be seen to create a “moral hazard” – encouraging future governments in Greece and elsewhere to engage in similar behaviour.

The solution could be a dual bond structure for government financing (including Eurobonds). This would not eliminate the Greek crisis but would help mitigate its systemic importance.

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