Its the classic Keynesian trick that if you owe a smal amount you are in the creditor's power but if you owe a large amount the creditore is in your power. Greece is in the latter situation and they are the monopoly buyer of their bonds as no one else will touch them. Most of these bonds are held by other Eurozone banks and a few pension funds. No private investor in their right mind would have bought this paper.
The Greek debt mountain then gets reduced by up to €40 bn enabling Greece to get more loans from the IMF and thus avoid bankruptcy for now at least. In politician speak its kicking the can down the road but it comes at a price. Who will buy Greek debt in the next 10 years? Well only those pressurised by their political masters committed to the grand Euro project to preserve their reputation. Will that be enough? Only if the electors back these politicians and that's what concerns Merkel and the rest.
It is one of life's great truths that all politicians careabout is getting re-elected back into power. Whatever happens the Eurozone finance ministers will proclaim this Greek Dutch auction a great success. Their electorates may think differently if they engage their brains.