Greece is likely to remain in the euro even if it defaults on a €300m repayment to the International Monetary Fund on 5 June, credit ratings giant Moody's said today.
Although analysts have speculated over the likelidhood of a Greek exit from the Eurozone, today it would not happen automatically, according to the report, which has been shared with the FT.
"A Greek exit from the Euro is not an inevitable consequence of default," said chief credit officer Colin Ellis, adding that the decision to split would be a “political act”.
If the government were to require banks to accept scrip at par with the Euro, that would likely lead to a run on euro bank deposits, potentially leading to a deposit freeze and capital controls.Capital controls would not necessarily entail exit: they were used effectively in Cyprus in 2013 to contain the pressures on the banking sector. But the prohibition on the free withdrawal of euros in Greece, and their transfer elsewhere within the currency union, could indicate a higher risk of eventual exit.