Here are the major developments we’ve seen so far:
- Merkel confirmed that nothing will happen at today’s EU summit in statements made to reporters.
- According to German newspaper Die Zeit, the European Central Bank has already set up a crisis committee to prepare for a possible Greek exit from the eurozone.
- A Eurogroup draft document seen by Reuters suggested that the European Union offer Greece €50 billion to leave the euro quietly (via ForexLive).
- Clemens Fuest, a senior advisor to the German Finance Ministry, told us that the German government is not as resolute about Greece sticking to its current bailout plan as they’d like everyone to believe.
- Investors are chattering about an unconfirmed report that Merkel is proposing some kind of bank deposit guarantee program.
- Hollande told reporters that while he’s not expecting EU leaders to endorse eurobonds today, they could make some progress on this issue in June (via @ItalianPolitics).
- Citi Chief Economist said that his team now believes Greece will leave the EMU on January 1, 2013, or else early next year.
What happens when a country defaults? http://www.ft.com/cms/s/2/0a35504a-0615-11e1-a079-00144feabdc0.html#axzz1vo638bLh
Deputy Prime Minister Nick Clegg says a Greek exit from the euro would have a "very unpredictable knock on effect" on the global economy.
ROME/HELSINKI, May 24 (Reuters) - At least half of euro zone governments as well as banks and large companies are making contingency plans in case Greece decides to leave the single currency area, even though the preferred option is still for Athens to keep the euro.
Italy's Deputy Economy Minister Vittorio Grilli said his country was ready for such a possibility, if Greek voters on June 17 give power to parties that reject reforms agreed with the EU and IMF in exchange for emergency loans.
