Watch deposit flight, not the eurocrats

by Paul Mason

BBC News
May 16, 2012

One way the current crisis could nix Greek euro membership is if the bailout fund - the EFSF - refuses to dole out the relevant billions on a date coinciding with the Greek state having to use said billions to repay its debts.

That is the "political trigger" to euro exit. But market participants are watching something else: the flight of deposits out of Greek banks and into other Euro currencies.

That is because the normal mechanism for making payments across Euro borders, called TARGET2, is seen as the economic trigger for a euro exit.

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