According to IIF director Charles Dallara in a Bloomberg interview, "ECB will be insolvent if Greece were to exit the euro. Europe would have to first and foremost recapitalize its central bank."
Excuse me for asking but how would they attempt to do that? Print Euros?
Please consider Dallara Says Greek Euro Exit May Exceed 1 Trillion Euros
Via email I received an interesting set of facts from Barclays regarding banking exposures to Greece.
Greece: Euro area official sector exposures in excess of EUR290bn
Euro area official sector exposure
It's been crystal clear for weeks, if not much longer, that Germany has been actively seeking to persuade Greece to abandon the Euro.
Confirmation came on February 7 with Merkel's Official Denial "I will have no part in forcing Greece out of the euro"; Schäuble Starts Salami Tactics on German Participation, Calls for Vote .
The eye of the hurricane over Southeast Europe may soon be shifting, exposing Greece to the same 150 mph gale turmoil everyone has grown to love and expect over the past three years as soon as this month, when a new proposal by Greece is due on how to cut a massive 150,000 public sector jobs: a move which will result in an immediate surge in public unrest, and an exponential jump in strike activity. As Bloomberg reports, "Greece is locked in talks with international creditors in Athens about shrinking the government workforce by enough to keep bailout payments flowing.
Reuters reports Greek PM, Finance Minister Will Miss Summit Due to Illness.
Illness means both Greece's new prime minister and finance minister will miss an anxiously awaited summit of European leaders later this week and delayed a visit by the country's international lenders.
The once taboo subject of a Greek departure from the eurozone cracked in the past couple of weeks, primarily with threats to Greece.
Today the exit discussion dam broke wide open as Eurozone tells members to make contingencies for "Grexit"
Euro zone officials have told members of the currency area to prepare contingency plans in case Greece decides to quit the bloc, an eventuality which Germany's central bank said would be "manageable".
A small dose of reality has set in for a group of European central bankers: Euro Officials Begin to Weigh Greek Exit as Euro Weakens.
Greece’s possible exit from the euro moved to the center of Europe’s financial-crisis debate, rattling markets as authorities in Athens struggled to form a government.
Marc Chandler submits:Three separate developments underscore the risk aversion theme today: Disappointing Alcoa (AA) earnings to kick off the US earnings season, the continued snugging of Chinese rates, including a 50 bp hike in reserve requirements (for large banks), and new worries about the outlook for Greece.The EU has raised questions over the credibility of Greek macro-economic statistics after having revised its budget deficit
As most of you already know, Greece is in big, big trouble. Its deficits are enormous, its debts are larger, and its credit quality is so shaky that it may set a world record on the Richter Scale. For a while now, the consensus has been that larger, more solvent members of the eurozone would bail the country out. Greece's creditors are saying, in effect, "Nice eurozone you've got there . . . shame if anything happened to it."