Renewed uncertainty over the fate of the euro poses considerable riskfor Asia, a region that includes some of the world’s most exportsensitiveeconomies. The 2008/09 recession saw GDP growth in EM Asiadecline as much as it did during the Asian Financial Crisis, an indicationof what’s at stake for Asia in the Greek election. As in 2008, the policyresponse to a global growth should would likely include a combinationof FX depreciation, interest rate cuts and (quasi-) fiscal stimulus.Chinese policymakers have already shown a determination to ease(quasi-) fiscal policy, accelerating approvals of new projects andencouraging banks to finance them. We expect RRR cuts but onlylimited rate cuts and do not expect the RMB to depreciate significantly.The policy response in Japan is hampered by very high debt and deficitsand near-zero interest rates. Further expansion of the BoJ’s balancesheet can be expected but JPY appreciation might offset any stimulus.