Greece currently the focus of the eurodebt crisis now in its third year, looks to have managed to close on an exchange to effectively default on their national debt and reduce the 206 billion euros of privately held Greek debt by 53.5 percent.

While markets are celebrating the default the real question is, who will be next?

Italy, Spain, Portugal are all marginal economies that will contract under the new austerity sweeping Europe, and may look upon the default in Greece as an easy option to resolve their own sovereign debt issues.

ECB forecasts showed the economy could shrink by 0.5 percent this year and at best grow by a meager 0.3 percent, a slight downgrade of its previous estimate.

Available survey indicators confirm signs of a stabilization in the euro area economy. However, the economic outlook is still subject to downside risks, ECB president Mario Draghi said after the central bank left interest rates at 1 percent.

Greece's largest banks, most of the country's pension funds and more than 30 European banks and insurers including BNP Paribas (BNP) SA and Commerzbank AG (CBK), agreed to the offer.

While Greece would prefer a voluntary deal, the government has said it will use so-called collective action clauses to force holders of Greek-law bonds into the swap if the private sector involvement fell short and it got approval from investors to change the bonds' terms. The Greek government had said it wanted participation above 90 percent and was seeking a minimum level of 75 percent.

This type of action supported by the ECB, World Bank and IMF clearly values Europe's sovereign debt at cents on the dollar and institutions holding or invested in that debt should be writting down the valuations.

Shayne Heffernan

Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.

Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.