Photo: Wikimedia Commons
With the austerity vote potentially down to just a 1-vote cushion in the Greek parliament, the question suddenly becomes: What does Europe do if the vote fails, and therefore Greece becomes ineligible to receive further aide.According to an article in today’s Financial Times Deutschland, a contingency plan is already being worked on.
Per our Google translated version it sounds like Plan B goes something like this: First, acknowledge that a vote failure would not represent instant bankruptcy. Perhaps some new deal could be worked out with conservative MPs to vote for something. That isn’t clear.
If that fails: ringfence Spain!
With Portugal and Ireland already out of the market (with government funded by the IMF for a while), the focus then turns to the biggest country that’s in the market, and that’s obviously Spain. How you protect isn’t clear, but a country whose economy makes Greece the size of a gnat obviously becomes worry #1.
(via Megan Greene)
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