And this is why, for quite a long time already, the Bundesbank has been proposing that an automatic extension of the maturity of government bonds be triggered whenever a sovereign applies for ESM assistance. As things now stand, a large share of the assistance loans are being used to pay off the original creditors.
This means that the original creditors, such as banks, are then off the hook. Automatically extending maturities, however, would leave them on the hook, and they could be held liable in the event of a debt restructuring later on. Admittedly, it has to be assured that the default of a sovereign does not immediately rattle the entire euro-area financial system.