More and more eurozone politicians are considering letting Greece slide into insolvency and preparing to prop up their banks, according to German newspaper Der Spiegel.
A report from CNBC also suggests that French President Nicolas Sarkozy and German Chancellor Angela Merkel are already considering devoting some of the soon-to-be-expanded European Financial Stability Facility's funds to bank recapitalization.
Headlines over the last few weeks show an increasing willingness to support failing banks and let Greece slide into insolvency, even though Paris and Berlin are continuing to support the country publicly.
And with Greece continuing to miss deficit-reduction goals, experts are now suggesting that rescuing the banks could actually prove cheaper than bailing out the country as a whole.
"The bailout package merely protracts the solution to the crisis, but a debt haircut would at least be the beginning of a solution," German economist Herald Hau told Der Spiegel. "With a debt haircut, around 80 percent of the costs would be carried by actors in international finance -- from private investors, funds and insurance companies...Taxpayers would be hit less hard."
Analysts estimate that European banks would lose about $350 million if Greece defaults. While that number is substantially higher than the approximately $150 billion the eurozone will likely spend on a second bailout, a recapitalization of this magnitude may prove a smarter investment if EU countries have to recapitalize their banks anyway.
Whispers of a eurozone "Plan B" comes even as a second Greek bailout and expansion of the EFSF nears ratification. That will likely happen sometime next week.