Greece: where are we now?
In theory, all the international support for Greece since May 2010 has been preparing for this day.
Without help, the Greek government would have messily defaulted long ago, with who knows what consequences for its neighbours and the entire global financial system.
The bailout bought time for the country to renege on its obligations in a more orderly fashion, when the world was also a safer place.
Is that what has happened today? Well, yes and no.
As I said on the Today programme this morning, as sovereign defaults go, this is about as orderly as they come. But partly thanks to all this support from its neighbours and the IMF, the Greek government will still come out of the process with too much debt.
There are some loose ends to clear up; not least, those pesky investors holding international law bonds, who've refused to play nice.Damage contained
Yet, even the news that collective action clauses will be used to strong-arm some bondholders, for the first time in a developed economy, has barely caused a ripple in the financial markets.
Investors are disappointed, maybe. But not surprised. The ground had been carefully laid and the damage - so far, at least - has been contained.
All of which makes it sound like a roaring success for the "buying time" approach.
Except, they have gone to all this effort for a "default" which does not really do what Greece needed it to do.
Private investors may have lost nearly 75% of the present value of their holdings of Greek debt. But since the deal only involves the privately held debt, it reduces the total stock of Greek debt by less than 30%.
A similar "haircut' for private creditors, had it been attempted in 2010, would have given much greater relief. But back then, the Greek government's balance sheet was not heavy with the weight of the international community's generosity.
At the start of 2010, Greece had a debt stock of nearly 125% of GDP, but all of that was owed to the private sector. By the end of 2012 it will owe more than 80% of GDP to its friends in the EU and the IMF.
That's not including the debt held by the ECB which it bought on the secondary market, from private investors, which, in a complicated and controversial arrangement cooked up a few weeks ago, will not be part of the swap.
The upshot is that, even if everything goes according to plan - as it invariably has not over the past few years - all this haircutting of private creditors will still leave Greece with a public debt mountain worth more than 120% of its national income in 2015. Only this time, two-thirds of the debt will be owed to the official sector.
Those official loans have already been "restructured", in the sense that the interest rate has been cut and the maturity extended. But there is surely more to come.Recession
In the meantime, there are good reasons for that 120% figure. Any lower, and investors would have looked to Italy and Portugal, and decided the mobile hairdressing salon was about to move on to them. Any higher, and the programme would lose all remaining macroeconomic plausibility.
But neither of those arguments can be much consolation for the Greeks, entering their 5th year of recession.
So, yes, there is plenty in this deal for the architects of this deal to be pleased about.
Even those who believe Greece (and maybe others) should have been allowed to default years ago will welcome the fact that collective action clauses are to be used for the first time in an advanced economy. Whether the authorities like it or not, this does set an important precedent.
Greek ministers will also be relieved that the convoluted "bailout' process they are involved in can stay on the road a bit longer, assuming Greece can now qualify for its next lump of official support.
However, if the past 2 years were all about buying time for this moment, it would be reasonable for ordinary Greeks to look at today's outcome and feel seriously short-changed.