Greek Deputy PM: "Debts exist to be restructured"

Call it a Freudian slip, or perhaps it was one of the first honest statements by a European politician regarding the sovereign debt crisis. According to ekathimerini.com, Greece's Deputy Prime Minister Theodoros Pangalos spilled what could be in the cards for holders of Greek debt. The Deputy PM said "Debts exist to be restructured..We may pursue it ourselves or the option may be offered to us and it could be in our interest to turn it down.” No doubt this will cause terrified Greek bond holders to buy as much Greek CDS as they can. And right now that protection is mighty high at 820 bps. More importantly. how do you say "debt default" in Chinese? After all, the Chinese have been big buyers of Greek debt, and publicly said they have confidence in the Greek government. They thought purchasinhg Greek debt at 10% was an easy investment. I wonder how the Chinese will react when the Greeks say in effect "F-You" and renege on their debt obligations? Do they get a few crappy islands as a consolation prize, at least? The Chinese should remember the old proverb: Thou shall not invest in bankrupt countries bearing high yields.

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Greek Deputy PM: "Debts exist to be restructured"