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"Default" is the safe word for solving the puzzle with the Greek debt crisis. The advisable definition is "selective" and it is the focus of the discussions held during the emergency summit of the leaders of the European Union. Now, all figures in the Union are convinced that Greece is unable to deal with the internal reforms to reduce the budget deficit and at the same time to reduce the foreign debt. Obviously, it will not get away without restructuring in one way or another, but the question is how to make it painlessly.

It is almost certain that credit rating agencies would perceive the changes in the debt structure of Greece as default but this is no longer of European leaders’ concern. Currently, the main issue is to avoid the complete suspension of debt payments. The European leaders are willing to reduce its volume with a suede glove in order to calm the market and then to continue with the implementation of the recovery plan for Greece and with its domestic reform. Even the pillar of the anti-default idea the President Jean-Claude Juncker said before the summit that selective or not, Greece’s default is not desirable, but it is not excluded.
 
European Commission President Jose Emmanuel Barroso was clear that nobody should be under any illusion and that the situation in the old continent is very serious.  He stated that a solution is necessary; otherwise, all countries of Europe and beyond would fill the negative consequences.  European taxpayers will have to pay out of their pockets again, but the summit will decide how much. European politicians took the final decision that the rescue of Greece and any other "naughty" state will not happen only with public money, but private owners of Greek government bonds will join the dance too.

One of the most discussed scenarios for saving the situation is the re-purchase of Greek government bonds on secondary markets at prices below face value and lower interest rates or exchange of bonds at maturity with others of 30-year maturity. Another option that looks attractive to politicians and bankers is the more active participation of the European Financial Stability Facility (EFSF) in solving the Greek debt problem. The Facility will continue to accept the Greek government bonds as collateral instead of being swallowed by the European Central Bank and will continue to fund the country under strict conditions. The interest rate of the bailout that is expected to be granted under this option will not exceed 3.5%.

Besides the above proposals, there was much of a talk in recent days about imposing a tax on European banks, the proceeds of which will be used for the absorption of the Greek debt crisis. Certain financial institutions did not like this idea and stated that they would refer to the court if the tax takes effect. According to the latest information, the idea of imposing an extra tax on the banks was withdrawn in Brussels not to trouble the anyway muddy waters of the EU finances.

In all cases, it is clear that the German Chancellor Angela Merkel and the French President Nicolas Sarkozy have reached an agreement on the final solution of the Greek problem, but are still holding their cards. According to CNN, the new program provides for the exchange of bonds for which private owners of the Greek debt will be encouraged to exchange them for new 30-year bonds. The replacement plan will reduce the Greek debt by about 90 billion Euros.

Not only will the decision on the second bailout for Greece be taken in Brussels today, but also on the measures to prevent the spread of the financial crisis within the monetary union. The summit should give a final answer to the question "How far will the debt crisis go?" The Prime Minister George Papandreou, but also the President of the Bank of Greece George Provopoulos is attending the emergency summit in Europe on the Greek side. Greek analysts hope that the second bailout would involve measures to stimulate the economic growth as well as investment opportunities.

Foreign analysts predict that if the Greek government does not take seriously the internal changes, the country will not get away with insolvency in 2012. Whatever the bailout for Greece, the structural changes and the reduction of the bloated budget expenditures are crucial to financial stability. So far, there is no consensus in the country for the mix of policies that will clear the budgetary imbalances, and the decisions taken at European level to tackle the debt crisis are not enough for emerging from the crisis.

In the event of suspended payments of the foreign debt, political and social chaos will explode in Greece that will last several months, some analysts foresee. The foundations of the local economy will be irreparably undermined until a political control is established. The unemployment could reach even 20% of the working age population – a figure that is not too far from today's 16% of unemployment. The average salary will crash to 500 Euros from 1,000 Euros today and Greece will finally become competitive with other European economies at the expense of the living standard in the country. New opportunities for direct private investment and business opportunities will open and at the end of this scenario, Greece will return to positive economic growth, the fruits of which will not be distributed among the factors within the country but will go to outside investors.