Argentina's restructuring

Argentina's debt restructuring: "IN 1902, after Venezuela defaulted on its sovereign debt, German, British and Italian gunboats blockaded the country's ports until the government paid up. In 1881, after the Ottoman empire failed to honour its obligations, European powers simply seized Ottoman customs houses and helped themselves to their due. The options available to more than 500,000 aggrieved creditors of the Republic of Argentina, which defaulted on bonds worth $81 billion in December 2001, were more limited. After much bluff and bluster, a large majority of them meekly surrendered their claims before a deadline on February 25th, in exchange for new bonds worth roughly 35 cents on the dollar."

FT.com / Comment & analysis / Columnists - Martin Wolf: Argentina holds a weak hand

His main points: 1) If a sovereign decides that it is more painful to service debts than default, only another sovereign can prevent it.
2) Lending to sovereigns is risky. 3) Moral hazard worries are overdone. 4) No default may be more painful than default. 5) Once default is optimal, a deep default is the most optimal. 6) There is a role for the IMF in identifying what is a sustainable level of debt. 7) There is no need for a mechanism for sovereign debt restructuring.