For policymakers in Europe the Greek referendum means that, now at the latest, the time has come to prepare for the extreme case. Top of the list must be prevention of a European banking crisis. The countries themselves and the rescue fund have at their disposal the funds necessary to achieve this. Secondly, countries like Portugal and Ireland are likely to be affected by speculation of a similar scenario. But this is likely to recede as long as policymakers in these countries stick to their resolute course.
It is essential now to clarify swiftly the remaining details of the new euro rescue fund instruments and the expanded private sector involvement. Excessive perfectionism is not appropriate right now. First and foremost, the partial insurance of bonds needs to be up and running for an emergency. That would go a long way to reducing the risk of contagion to countries such as Spain and Italy.