From an interview (9/14/2010) with German magazine “Der Spiegel” former German Finance Minister Peer Steinbrueck (2005-2009):

SPIEGEL: In the end, the euro-zone countries approved a bailout package that required Athens to impose a drastic austerity program and that includes loans worth €110 billion. Are the measures sufficient?

Steinbrück: Just look at the numbers. Despite the package, Greece’s national debt will increase next year from 120 percent of its gross domestic product to at least 140 or even 150 percent. That translates into a growing interest burden that will eventually be too much for the country to take.

SPIEGEL: What do you recommend?

Steinbrück: Greece will not manage to get back on its feet without restructuring its debt. There is no way around it. The country’s creditors will have to reduce a portion of its debts by extending maturity dates, lowering interest rates or giving them what’s called a “haircut” in financial jargon. There are those who will be upset that I’m saying this publicly, but it’s just the way one has to deal with heavily indebted countries when they are members of your own club. There are established procedures for doing this.

SPIEGEL: But such a procedure would create substantial losses for the creditors. And those creditors also include many European and German banks, like the ailing HRE.

Steinbrück: Then those banks will have to write off the bad debt. This won’t be a problem for many banks. And for those that are not in this position, there’s the bank bailout fund. It would be a serious mistake to keep putting off the inevitable out of consideration for a few banks and to the detriment of taxpayers. It would also mean unnecessarily prolonging Greece’s problems.

The full interview here