The ECB must allocate (create out of nowhere) enough “new” Euro to allow the most indebted nations time to fix their situation, whatever fix that might involve. This is not really that radical a solution as what I am proposing is effectively just using the same rules that the IMF uses in managing SDRs. So how many Euro would Greece or Italy need ? Any allocation effectively wipes out that portion of their debt and the remainder is restructured as a loan from nations who did not need to use their “new” allocation of Euro.
So here are the actual numbers of Euro that would get given to each nation based upon the EFSF quota rules and a 3 trillion allocation. The 3 trillion is what our new IMF managing director hinted at ! http://www.telegraph.co.uk/finance/financialcrisis/8788223/Christine-Lagarde-IMF-may-need-billions-in-extra-funding.html