It looks like the ECB has caved in under the pressure to take a haircut on Greek debt. But only to a point. The central bank is not willing to take a loss, so it will transfer the bonds at cost to the EFSF.
WSJ: The idea is for the ECB, in effect, to exchange the Greek bonds it holds for bonds of the European Financial Stability Facility, the euro zone's temporary bailout fund. The ECB will hold the highly rated EFSF bonds on its balance sheet in place of the Greek bonds it bought as part of its Securities Market Program.Apparently this exchange won't take place until the deal with the Greek bond holders is finalized. It means that the public sector is in fact taking a haircut, but rather than having the losses at the ECB, they are being taken at the EFSF (assuming the fund is not going to try subordinating the private holders.) The EFSF will not participate in the negotiations - it will be a passive participant in the bond exchange. In effect the EFSF is being used to recapitalize the ECB.
Update: Please see Comments below for an update/clarification from Blankfiend
SoberLook.com
