German Finance Minister Prepares for Possible Greek Bankruptcy

09/10/2011
DER SPIEGEL

German Finance Minister Wolfgang Schäuble, who is reportedly doubtful that the country can be saved from bankruptcy, is preparing for the possibility of Greek insolvency. Officials in his ministry are currently reviewing scenarios for handling such a situation, exploring what it might mean for the rest of the euro zone. Under the first scenario for a Greek bankruptcy, the country would remain in the euro zone. Under the other, Athens would abandon the common currency and reintroduce the drachma.

The European bailout mechanism, the European Financial Stability Facility (EFSF), is playing a key role in those considerations. Soon the EFSF is expected to be given new powers agreed to by European leaders at a special euro crisis summit in late July. Two instruments at the EFSF's disposal are at the forefront of the Finance Ministry's scenarios.

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http://www.spiegel.de/international/eur ... 82,00.html

Not yet I,m not ready for

I believe the EU PC term is "orderly insolvency". Terms like "bankrupt" and "default" are no longer in the ECB nomenclature.