Greece will leave EMU on 1 January 2013. We believe the ECB will be willing to provide liquidity support for Greek banks (to replace lost deposits) until the June 17 election, either directly or via the expansion of Greece’s ELA. But, we assume that the election will not produce a viable government that can follow the Troika plan, leading to a stalemate between the Greek government and official creditors, and to the suspension of EFSF/IMF funding
These quotes weighed heavily on the EUR in overnight trade.
