How Greece Can Run Out of Cash and What ECB’s Draghi Can Do
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As talks between Greece’s new government and its euro-area partners turn confrontational, Mario Draghi may soon find himself with an unpleasant dilemma.
The European Central Bank president controls the last source of funding that euro area lenders turn to when they’ve been denied money everywhere else. Greek institutions are now clinging on to that increasingly tenuous lifeline, as deposits vanish and collateral runs short. In the event of a political breakdown, it will be the ECB that has to decide whether or not to cut it.