[baguasquirrel]

Even if it does get repaid over a longer period, this more or less means those bonds are shot as an investment. Moreover, this means that no one is going to lend the Greek gov't any more money. I didn't see any terms in the agreement where they said they'd be lending the Greeks more money. That means the government is going to stop working. Or Greece will exit the Eurozone. The Greek gov't could of course cut all the way back, but that means a depression, which also means the money won't be paid back.

[jeffreymcmanus]

That remains to be seen; they aren't going to access the global credit market for at least few years anyway because they have too much debt to begin with.

But the existing bonds still have value and they'll still be held as investments. It's not like the whole country has collapsed and the value of its debt is worthless. A haircut is just that, a downward adjustment in the value of the debt.

It's inane to think that Greece will exit the Euro zone because of this. The Euro zone is the only thing keeping them going at this point.