i. The reaction of the EU big players to default or being a good European

Considering that the reward for being a good European is Austerity^TM...

ii. The reaction of the markets to default or being a good debtor

First, in what fictional alternative universe does the restructuring of Irish banks impinge on the credibility of the Irish state vis-a-vis its obligations?

Second, we know perfectly well how the markets react to people who are good debtors. They call them suckers and proceed to fleece them. The possibility of default is already priced in - if you continue to pay the punitive rate but take default off the table, you're just letting yourself and your money be parted.

- Jake

Friends come and go. Enemies accumulate.