More evidence that Europe is preparing for a Greek default
- Eurozone countries have reached a Greek emergency plan, according to Sueddeutsche Zeitung.
- Greek parliament must approve capital controls
These are some confusing headlines but the kneejerk has been to sell the euro and ask questions later .EUR/USD down to 1.1247 from 1.1275. EU finance ministers meet Thursday and Friday in what will likely be a meeting about sorting through the Greek wreckage, rather than making a deal.
Capital controls are something Greece would impose to keep money 'in'. It's not something that would be imposed by Eurozone countries on money leaving unless it was to work in synch with something Greece had announced.
Here's a Google translate version of the story, via Live Squawk.
Update:
Reading through it quickly. It seems as this might be a contingency about what to do if Greece introduces capital controls but if a German speaker could weigh in, it would be helpful.
One part of the story is bullish for the euro. It seems to suggest that leaders still want to give Greece one more chance to make a deal and that the real deadline is this Friday.
Update 2:
...and the euro bounces back. 'Capital controls' freaked traders out for a second and the newswire headlines are confusing but the story is ambiguous.
Update 3:
Now FAZ reports that Schaeuble is drafting options for Greece. There is also more talk that capital controls will be imposed on them. I guess this means that if banks want to move their money out, they won't be able to use the eurosystem.
