Euro Zone Finmins To Discuss Outcome Of Greek Vote On Sunday

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Euro zone finance ministers are scheduled to hold a teleconference on Sunday evening to discuss the outcome of Greek elections, two euro zone officials said on Thursday.

Greece holds a parliamentary election on Sunday and polls show that the leftist SYRIZA party, that rejects the terms of the euro zone bailout for Athens, is neck-and-neck with the pro-bailout New Democracy party.

If STRIZA won the election and Greece were to tear up the terms of the bailout, France and other euro zone countries have warned that Greece could face leaving the euro zone and returning to the drachma currency.

One euro zone official said that the main concern, if SYRIZA overwhelmingly won the election, was the risk of large capital outflows from Greece if depositors worry their savings in euros could later be frozen or converted into drachmas.

"It is not even about a bank run on Monday morning after the elections. People can now log on to internet banking and make transfers on Sunday evening as well," a third euro zone official said, explaining the rationale of the ministerial call.

If a SYRIZA victory sparked panic about a return of the drachma, the immediate action would come from the country's central bank, backed by the European Central Bank.

The Greek central bank has the ability to directly inject cash into the country's banks, if savers rush for their money, in the form of Emergency Liquidity Assistance, which although provided by the ECB, would be underwritten solely by Greece.

Top ECB officials and staff would also keep a close watch from Frankfurt and keep in touch with other euro zone central banks, in case there were signs that people in other countries such as Spain were starting to pull their cash from banks.

Among the euro zone contingency plans for a possible Greek exit from the euro are the suspension of the Schengen passport-free zone and imposing capital controls and limiting ATM withdrawals.