Le Figaro Reports French Banks Propose "Voluntary" 30 Year Debt Rollover, However With DOAing 30%-50% Implied Haircut

"The latest episode in the "we'll make it up as we go along" rescue of the Euro comes from France where as Le Figaro reports, a working group of French banks led by BNP Paribas has proposed, and been agreed to by the French Treasury, that maturing debt would be rolled over into a a 30 year maturity piece, accounting for 50% of the total existing debt, and another 20% would go into a "zero coupon" fund focused on high quality stocks. Also according to Le Figaro, borrowings under the proposed scheme would pay an interest equivalent to what Greek "public" interest is plus a variable interest rate "likely to be linked to an economic Greek indicator such as GDP" (which being negative for years will likely means lower interest than prevailing).

Of course the problem with this proposal for anyone who can do simple math, is that the implied haircut for the Greek Treasury would be between 30% and 50%, depending on how one accounts for the treatment of the sinking stock market ponzi fund. But certainly at least 30% of the rolling over debt would not come back to the issuing authority. And since French banks are unaware of simple rating agency methodology, any debt exchange, whether called "voluntary" or otherwise, which involves a notional haircut of any variety is an immediate event of default. As a reminder, avoiding a rating agency EOD, far more than an ISDA CDS trigger determination, is what this whole charade is all about. Since an EOD would mean Greek debt becomes ineligible in any capacity for ECB collateralization, and since there are likely hundreds of billions in Greek sovereign debt pledged to the ECB either directly, or indirectly, through Greek banks, this funding avenue closure would commence the waterfall that triggers the liquidity cascade that culminate with every single European money market fund breaking the buck as has been discussed previously.
As such, this latest proposal is also Dead On Arrival.

Elsewhere, Germany was making more noise, claiming the "voluntary" bailout would be agreed upon by everyone "or else" and that Greece would be doing the worst thing possible if it were to not accept the generous terms of the second Greek bailout which is now bigger than the first one..."

at http://www.zerohedge.com/article/le-figaro-reports-french-banks-propose-voluntary-30-year-debt-rollover-however-doaing-30-50-?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29