Not only that, but in the Germanic countries it's politically untenable. Merkle would be quickly removed from office at any hint of an unsecured bailout and no reform in Greece.
And it's also certain that Greece will never reform and never be able to pay it's debts nor the diminished interest on them.
There's no other answer besides cut them lose and let the chips fall where they may.
“see how the EU can institute the ultimate moral hazard”
They gave up the right to impose it on others when they all demanded a bailout on the 2008 crisis which they were all willing and knowing players in. They stopped recognizing moral hazard and substituted too big to fail.
The Germans fought two world wars trying to conquer Europe and finally succeeded with the EU
Bet they wish like hell they hadn’t