Why is it that nobody seems to be considering the alternative idea? That the debts won't be rolled over. That the can won't be kicked any more. That the debts won't be ignored any longer. That they will burn and go to debt heaven (or is it hell?). That perpetuating the $IMFS is not the only game in town.
Here is what I think will happen. The troubled sovereigns will default. The banks around the Eurozone will suffer massive losses as a result of the failed loans to those sovereigns. The member CBs of the ECB will QE some new base money into the system to replace the missing deposits at their banks — the money that won't be coming back to the savers due to the defaulting sovereign bonds.
There aren't more euros in the system, they're simply qualitatively different than the ones that were replaced. They are available to spend earlier than planned. Like, immediately. M1 base money replaced M3 credit money that was already in the system but vanished.
So, for example France and Germany will receive a massive infusion of new M1 base euros into their banks, to replace the missing M3 credit euros that can't be returned to depositors because the loan failed. There will be a much higher number of euros in the overall Eurozone that day than there would have been otherwise (they would otherwise have arrived later, as and when the loans were worked off by the debtor nations). But no more than would have been in the system later if everything had worked out according to the old plan. All this money was already baked into Eurozone M3 before.
A higher percentage of the euros in the system will reside in Germany and France — no more than were going to later anyway, in fact slightly less because there won't be the interest payments that would have rolled in over time too, but for today there are more than were previously planned. A lower percentage of current euros would also be resident in the defaulting sovereign nations than would have otherwise been the case today. On the plus side, they won't have to find the euros to pay the interest over time though. Or the loan principle.
The creditors have a bigger slice of the pie than before. The debtors have a smaller slice. More supply (supply brought forward from the previously-planned future) will have diluted the value of the euro today, earlier than planned, but the creditor nations will have been repaid in full for this dilution, and they are only receiving what they were scheduled to at a later date anyway. The dilution was going to happen over time anyway, it is simply brought forward to today. They are not down on the deal. You might even consider they are actually up on it, because they got their money back and can spend it early. The debtors are down on the deal, but at least still allowed to participate in the game as long as they agree to the new, stricter rules, and free from the shackles of their old debts. They'll have to learn to live within their means, but in the long run this is only healthy for them anyway.
What am I neglecting to factor into this scenario so far..? Could it be creditors elsewhere, outside the Eurozone, who can't dilute the euro money supply in their favour, like the Eurozone creditors, but who will also have a problem with the failed loans and an inability to return savings to their depositors? What will they have to do? They will have to make their own CB print the local currency to recapitalise their banks and make their depositors whole. Will this punish the debtors but bring the creditors out relatively better off? Or will it create a drop in exchange value for their local currency against the euro, because the supply most definitely then would have been immediately expanded beyond what was previously planned, not just early but previously unplanned. Is this rewarding the Eurozone members and punishing the non-Eurozone ex-creditors? I think so, yes. And, in particular of course, the Eurozone creditor nations — who now have a bigger slice of the cherry pie waiting for them to eat it, while the non-Eurozone creditors suck on a cup of their own brand bone sucking sauce.
Quite a show!