How EU incompetent ministers get it all upside down

The NYT reported a few days ago:

A deal was struck Monday to establish a 440 billion-euro safety net for debt-laden countries in the euro zone, a move that officials hope will calm the markets that have helped prompt a slide in the value of the euro.

They got it completely upside down. What happens is the following:

1. The countries like Greece have borrowed and spend way too much compared to their means, so they are not able to service the debt and even less to reimburse the principal.
2. Normally, when debt burden rises, the risk of default rises, so the interest rate goes up, reflecting the higher risk taken by the creditors.
3. When this goes too far, and a default or bankruptcy is about to happen, interest rates skyrocket. The amount of credit available collapses. Which is highly deflationary.
4. In deflation, the value of currencies rises. It means the Euro should go up against other currencies
5. If an actual default on the debt occurs, credit is destroyed, which is even more deflationary.
6. In deflation, the value of currencies rises. It means the Euro should go up against other currencies
7. But, everybody knows that the politicians and the central banks are fools, incompetents and incapable of letting the markets clear the system, and let the borrower default and clear the debt from the balance sheets and in the process, let the lenders either take their losses (or fill for bankruptcy). So in that case, the markets know that politicians and central banks will start to print like crazy in order to prevent the default.
8. Printing is pure inflation, and it means that the Euro should fall against other currencies.
9. So the conclusion is that these ignorant bureaucrats think that their printing 440 billion euros “will calm the markets that have helped prompt a slide in the value of the euro” while in fact, it is precisely the prospect of having this massive printing of worthless paper that created the drop.