Economic Summary for the week ended 21st May 2015

As Greece slips into recession, fears of the country running out of money are mounting. The 11th May Eurogroup meeting was meant to be a key turning point, but progress is slow- moving. Although Greece successfully paid the IMF €750mm  last Tuesday, Athens still owes around €25bn through the end of 2015. With ECB support via the Emergency Liquidity Assistant (ELA), a “Grexit”  is less likely  - - even in the event of a Greek Default.However, the ECB will weight up the political and financial costs of their support and may reconsider if the 20th July repayment to the ECB itself is missed. There are a range of possible scenarios if Greece misses its summer repayments, and while there is less contagion risk than in the past, investors could see volatility spread into other European markets.