Decoding the IMF: Greek deal doomed, exit likely

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2. actually, i'm quite heartened by this, as it means europe must write-off some of the debt

greece's creditors have resisted debt forgiveness or even debt extension as the rules would require them to write off the debt, which would have an impact on their own budgets.

however, greece's debt is clearly "bad" and some large portion of it needs to be written off, one way or another. the focus should be on how much can be recovered.

what the imf is now saying is:
(a) if there's no deal, greece will obviously default and europe will have to write the debt off.
(b) if there is a deal, the imf will only sign on if some of the debt gets written off.

either way, the fantasy of getting away without writing anything off has been taken off the table. now that the fantasy alternative doesn't exist, europe will have no choice but to do something that at least makes more sense than the crazy plans talked about thus far this round.