While Europe's strategy had long been to exact austerity in exchange for loans to keep over-extended governments afloat, a fierce recession in Greece and the rising threat of a global downturn again next year was already forcing a rethink. Belgian Finance Minister Didier Reynders said it recently: "We don't want Greece to die on the treatment table. We have to help it get back on its feet," he said, urging a gentler pace of cuts and a re-assessment of how to make its debt sustainable. Markets have punished eurozone leaders during the months of uncertainty since a second bailout was agreed in July, yet has never got off the ground with a first 110-billion-euro rescue placed on hold by European Union and International Monetary Fund auditors. It's been one delay after another -- the auditors pulling out of Athens inspections for almost a whole month and Slovakia threatening to torpedo changes to the bailout vehicle amid mounting talk of a proper Greek default and a euro exit. German Finance Minister Wolfgang Schaeuble conceded on Sunday that the July deal, which was to see banks and other private creditors accept a 21-percent 'haircut' on their holdings of government bonds, might not have gone far enough. Indeed, Luxembourg Prime Minister Jean-Claude Juncker, fresh from negotiating his share of the three-way Dexia rescue with Belgium and France, told Austrian television on Monday night that 60 percent might be a more realistic figure. Suddenly, after a year and a half spent insisting Greece would not be allowed to default, that's just a stone's throw away from the 70-odd percent of Argentina's debts that were written off after its December 2001 bankruptcy. Only this time, a 370-billion-euro debt pile is four-and-a-half times bigger than the burden Buenos Aires was carrying. "If we don't seriously cut the charges on Greece's debts, the country will struggle ever to emerge from the spiral it's caught in," said an EU diplomat. With panic setting in as banks stop lending to each other, fearful of who might be next to face a run on its limited capital, the politicians who told us taxpayers would never again bail out the banks are back doing just that. They argue there is no option, otherwise the credit drivers behind growing businesses and consumer spending all over the continent just dry up once more, creating a bigger, farther-reaching spiral of global recession. There is, nevertheless, no guarantee that the recapitalisation demanded will not carry consequences: for Belgium, Spain, Italy and France, four of the bigger euro economies behind stalled powerhouse Germany, hefty bills here could see their credit ratings downgraded. Both EU and IMF sources have said the overall hard-cash commitment would run to some 100 billion euros. No wonder EU president Herman Van Rompuy postponed a planned summit by nearly a week to October 23. The real deadline, following a trans-Atlantic autumn slanging match pitting Schaeuble against US Treasury Secretary Timothy Geithner, is to satisfy angry G20 partners when they meet at the start of November.