European Central Bank officials may have more scope to cope with a Greek restructuring than they are letting on even as policy makers warn that such a move could trigger the beginning of a “horror story.”

While German and French officials say the ECB would no longer accept Greek debt as collateral in its money-market operations should the country be forced to default, the ECB's rules are less clear and only say that such a step “may be warranted” if officials deem it necessary. The ECB's rhetoric may be as much about forcing Greece to step up budget cuts as it is about drawing a line in the sand, say Citigroup Inc. and Deutsche Bank AG economists.

“Without these ECB warnings, the Greeks wouldn't have come up with the announcement of additional measures,” said Juergen Michels, chief euro-area economist at Citigroup in London. “The ECB showed early with the eligibility requirements on collateral rules that they can stretch the whole thing pretty far.”