By Neil Unmack and Margaret Doyle

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Greece is on the cusp of a disorderly default; Portuguese bonds are tanking as investors price in sharp haircuts. But Ireland has successfully tapped international debt markets for the first time in 16 months.

By Neil Unmack

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The Bundesbank is no match for King Arthur. The legendary Celtic ruler drew the sword Excalibur from the stone with little effort, but the German central bank has taken over three years to start to offload its own Excalibur, a collateralised debt obligation backed by risky real estate debt constructed by the chivalrous financial engineers at Lehman Brothers. The bonds are among collateral the euro zone central banks had accepted in exchange for loans to Lehman and several Icelandic banks, which failed in 2008, forcing the euro zone to take a 5.7 billion euro provision, subsequently reduced to 2.2 billion euros.

By Neil Unmack
The author is a Reuters Breakingviews columnist. The opinions expressed are his own

European governments have suffered a triple setback. Standard & Poor’s has stripped France and Austria of their triple-A ratings, and cut Italy to the same level as Ireland. Greek debt talks have broken down, while the European Central Bank has criticised the region’s fiscal pact. After a brief lull, the euro zone’s sovereign debt crisis is back with a vengeance.

By Neil Unmack
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The European Central Bank’s refusal to participate in the big Greek debt swap and take losses on its holdings is looking stranger by the day. It looks increasingly like it might confer the ECB an informal preferred creditor status that would have the unintended consequence of undermining its own bond-buying programme.

By Neil Unmack
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The European Central Bank may be readying its bazooka. Euro zone bond markets are rallying amid hopes that an agreement by European governments on fiscal reform may clear the way for the central bank to start massive bond purchases. But bazookas can backfire.

Ideally, an intervention would create a virtuous circle whereby investors were once again willing to hold peripheral debt. That might allow the ECB to calm markets without actually buying that much.

By Neil Unmack
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Fears that Germany will have to underwrite the debt of other euro zone countries have pushed up the country’s bond yields in recent weeks. Common bonds would end the country’s days of super-cheap borrowing. But if it was part of a genuine fiscal union, funding costs need not go sky high.

By Neil Unmack
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The battle for the euro zone’s survival hinges on finding a way to unlock the European Central Bank’s firepower. Even if countries such as Italy and Spain implement necessary reforms, they may not be able to borrow at reasonable rates. The ECB can prop up markets by buying bonds in the secondary market, but is forbidden by European Union treaties and its own statutes from financing countries directly. One idea doing the rounds is to use the International Monetary Fund to circumvent the rules.

By Neil Unmack
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Greece needs a proper debt restructuring. Getting the country’s borrowing under control requires a serious haircut for both private creditors and euro zone governments. If it happened today, private bondholders could bear most of the losses, according to Breakingviews’ latest calculator. But if the euro zone delays, taxpayers will suffer more.