Greek stay of execution won’t lift the economic gloom

We’re throwing in the towel on a Greek euro exit in 2012. But that’s a matter of timing, not a change in our fundamental position on Greece or on the broader debt crisis. We still envisage a limited euro-zone break-up, probably commencing in 2013 with the exit of Greece. And it does not affect our expectations for the euro-zone economy. We retain our forecast that euro-zone GDP will contract by around 2.5% next year, well below consensus expectations but in line with the latest indicators.