So, they have cut their own hair... sadly, this is of no benefit to the debtor nations.

It follows that the ECB is now stoutly defending the speculators who buy the bonds at steep discount, gambling that they will be repaid in full (or with a modest haircut, at worst).

So, the original lenders (the bond purchasers) have, to a great extent, been punished for their profligate lending. The citizens of the debtor nations are being punished for their profligate borrowing. The reason this is all so painful is that there is a moral imperative to pay in full the only good guys in the affair :  the bond speculators.

Have I got that right?

_{It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II}