Greece: Why not declaring bankruptcy?

Martin Feldstein's piece in yesterday's Financial Times (Let Greece take a holiday from the Eurozone) caused us to send him a brief note and we will watch the reply of the sage with interest:

Dear Mr. Feldstein!

Your article - like most other articles concerning the Greek Debt Saga - tacitly assumes that one simple way to solve the problem is not feasible: a declaration of bancruptcy and subsequent resolution comparable to Chapter XI in the USA.

At present, the only two options that are being discussed are (1) a bailout by EU member states or (2) Greece leaving the Eurozone. Eliminating the option of bancruptcy from consideration creates an unproductive stalemate between two diametrically opposed viewpoints (aften aggravated by different ideologies regarding the philosophy behind the creation of the Euro).