For the creditors, the value of a public bond is considered to be intangible. If the State that has contracted the debt doesn’t pay, well - let it go to hell. It ends up in default. In principle, the value of a BOT is no different from that of any share of a company quoted on the Stock Exchange. Anyone who buys shares in Fiat or ENI knows that it can go up or down. He doesn’t ask for the intervention of the IMF or the ECB. It’s part of the game. The economy of a State is based on many variables, a GDP that can get bigger or smaller, a budget deficit or surplus, and unpredictable factors, like natural disasters or wars that can bring it to its knees. Anyone who buys the shares accepts the risks. The same should apply for those that buy BOT. If Formigoni, for example, has bought millions of euro’s worth of Greek bonds that today are worth 60% less, the responsibility is his, not the Greeks. (But why is the Region of Lombardy investing in shares? Does the Court of Accounts know how to respond?)
Anyone who buys public debt takes on the risk of its devaluation. With this rule, the risk would fall mainly on the buyer, and in particular on the banks that have hundreds of billions of euros of debts, to whom one could cynically say “No one forced you” or metaphorically “it’s your own f..king business!". This approach would reduce the use of debts to keep the economies of sick States on their feet. The public bond auctions would be practically semi-deserted. And it would be a benefit for the planet that is raving about “growth” without limits supported by endless debt. In 2012, 11,000 billion in public bonds will fall due in the world. Who will buy them?
A wife, tired of seeing her husband turning over and over in his bed for a debt owed to the neighbour, opens the window and shouts “Giovanni, my husband doesn’t have the money and he’ll never have it!” And then to her spouse: “OK, now the problem is his!” In the French novel "“La Guerre des boutons" {War of the Buttons}, two gangs of lads steal buttons from each other as trophies of war. The one with the most buttons is the winner. The final battle is won by the lads who decide to fight naked. A debt can be cancelled or restructured. The responsibility also lies with the buyer. They will never give up (but is it in their interests?). Neither will we. See you in parliament unless they do an electoral law that prevents that.