In particular, it implicitly means that the OMT programme could be activated for peripheral countries.
The ECJ just confirmed on 16 June that the Outright Monetary Transactions (OMT) programme announced in 2012 is compatible with EU law.
The ECB is very clear about the objective of this programme: “The bond-buying programme was created in order to preserve the singleness of monetary policy in the EZ and ensure transmission of the ECB’s policy stance to the real economy.”
The OMT programme could be triggered in combination with a precautionary financial assistance programme (credit line) from the ESM.
• Note that we should not rule out ECB interventions if contagion even in the scenario 2
• However, the main consequence, over the long term, would be that the very nature of the EZ would be modified, with very uncertain consequences, as one member state would have cleared a path of exit and put an end to the principle that Euro membership is irrevocable.
As Mario Draghi mentioned, there may be the need of a “Quantum Leap” in institutions to keep the EZ together over the long term.
In a nutshell, the most probable scenario is that Greece remains in the EZ, probably with an additional debt restructuring (but only for the public sector).
While we cannot rule out some excessive market reactions, with a new peak in financial stress, we believe that this market reaction would be short-lived.