Supposedly we are to believe that a rollover of Greek debt would be voluntary.

Bear in mind that that rating agencies have said such rollovers would constitute default. Nonetheless, and in a preposterous attempt to avoid reality, French Banks Said to Offer 70% Greek Government Debt Rollover

French banks, including BNP Paribas (BNP) SA, have told the French government they are willing to partly roll over maturing Greek government bonds in a bid to avoid a default by the debt-laden nation, three people familiar with the plan said yesterday.

Under the proposal discussed in recent days between the French Banking Federation and the French Treasury, bondholders would re-invest about 70 percent of Greek sovereign debt maturing from mid-2011 to mid-2014, said one of the people directly involved with the talks.

Fifty percent of the redemptions would go into 30-year Greek securities, with the remaining 20 percent invested in a fund made of “very-high quality” securities that would back the 30-year bonds, that person said. The proposal may be altered, he said. All three people spoke on condition of anonymity because the talks are ongoing and private.

The idea of a voluntary rollover of Greek debt is in and of itself ridiculous.

Now, French banks want to roll over 70% of the debt, dumping the rest of it it for whatever prices they can get, and have that rollover be considered voluntary.

Is this preposterous or what?

Mike “Mish” Shedlock
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