Comment by MadDemon

If a debtor can't pay their debt, you don't just get to wipe out the bond holders. There is some kind of negotiation to try to restructure the debt and see how much the bond holders can still get. Simply wiping out the debt would create a terrible precedent with terrible consequences for the credibility of the whole eurozone. Who would want to lend money to an EU country if they just get wiped out when things get bad? It would've also had bad consequences for the financial system and potentially caused some institutions to go belly up. The way that countries typically get rid of their debt is by printing money to serve it and thereby inflating it away. But that is obviously not popular among the remaining EU countries. It was always clear that the Euro comes with this constraint that you can't just inflate away your debt.