When Is A Default Not A Default?

When is a default not a default?

When it's a distressed debt exchange under the pseudonym of "smart debt engineering.

The Greek Finance Minister Varoufakis has proposed a debt swap wherein loans from the EU bailout would be replaced by GDP-linked bonds. Money owed to the ECB would be converted into “perpetual bonds”.

Whilst this sounds all very reasonable in theory, if the ECB et al were to agree to it, it would nonetheless represent a "notifiable event" and a breach of the conditions of the bailout; ie Greece will have defaulted.

This despite the fact that Greece is trying to spin the line that it isn't.