Why Greece’s Spillover Across Euro Area Will Probably Be Contained This Time

Greece's flirtation with an exit from the euro in 2011 and two cliffhanger elections in 2012 prompted the darkest days of the debt crisis, halted only by the European Central Bank's pledge to save the currency come what may.

Now, with the collapse of another Greek government, Europe's leaders, its more vulnerable economies and financial markets are better prepared. While euro in-or-out threats will echo through the Greek election campaign, the spillover across Europe this time is likely to be contained.

"We're looking at a Greece problem -- the euro crisis is over," Holger Schmieding, chief economist at Berenberg Bank inLondon, said by phone. "The euro crisis was all about contagion risk. I do not expect markets to seriously contest the contagion defenses of Europe."

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