Overnight, banking debt in six Irish banks (including the four bailed out on Thursday) was converted into state debt, payable by tax-payers.
The government said junior bondholders – who under new EU rules must take a hit before any state intervention – would be able to convert their bonds into shares, which will then be converted into senior debt.
Let's start with the grand total "fiscal gap" which is the combined total of current debts and future unfunded liabilities (the latter being converted into actual debts with each passing day).
Much of that private debt was converted into increased state debt which the same "markets" are now betting against.
Under the new agreement, this will be converted into long-term debt, 20- or 30-year bonds.
In addition, 110 million euros that Euro Disney owed to the parent in short-term borrowings will be converted into long-term debt.
Deferment of some payouts until the recipients retired neatly converted profits into debt, thus saving on tax.
Holders of the lowest layers of debt in bailed-out banks are likely to see their debt converted into equity and to take losses.
Mr Bofinger wants outstanding euro-zone public debt converted into "Eurobonds" with collective responsibility.
Investors in such issues will be "bailed in" (their debt converted into equity) if the bank gets into trouble.
