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Monitor on Greek Crisis: Monday day of reckoning …

  • June 30th, 2015
  • Posted by EU Australia

Greek flag 7-12eu-money-symbol-coins Greece has not met the deadline for payment of the next installment on debt due to the IMF, on Tuesday night.

There were eleventh-hour exchanges between the Greek government and EU Ministers, ongoing; Greece making a new proposal on debt rescheduling and terms, the other side talking now about waiting for the outcome of the referendum set for this Sunday.

Back story, posted on the weekend:-

On Friday, 26.6.15, the creditors negotiating with the Greek government over its debt repayments put down an offer of a bigger bail-out than earlier sought, but with an adamant demand for rigid austerity measures to be  extended in Greece.

The Prime Minister, Alexis Tsipras, returned to Athens for a late-night television address, calling a referendum for this Sunday, 5.7.15 ;one that would test support for his position against the final offer .

Voters would be asked if they accept the terms of the creditor group – the European Commission, European Central Bank and the International Monetary Fund.

Observers who consulted the protocols for loans agreements said it would be too late, with offers now coming off the table – and Greece required to make its next loans instalment by 1.7.15.

Yet, the move has brought home consequences of the squeeze on Greece, making this Monday, something of a day of reckoning

Banks in Greece saw a weekend run on cash, estimates running at €1-1.5-billion (A$1.45-2.2-billion; xe.com, 29.5.15), before being closed on Monday, with the government moving on currency controls and strict limits on cash withdrawals. Bills could still be paid on line. The ECB stopped providing credit to support bank reserves.

Stock exchanges in Europe took a tumble and the Euro currency was down. Stock prices were down elsewhere for the day, including in the United States, and Australia — caught between the uncertainty over Greece, and the current-down-turn on the Shanghai Stock Exchange .

Bankers and conservative politicians in Europe, having stuck out for imposing their own politics of choice, the austerity squeeze, on the Greeks, began to count the cost, in Euros, of an actual debt default and payment of nothing by Greece.

Against that, guarantees extended to Greece might be nuffified, but questions of a financial contagion returned; would bad debt beget more bad debt?

Jean-Claude Juncker, President of the European Commission, embraced the referendum idea. He told a Brussels media conference that Greeks would be best voting yes, to ensure they could stay in ‘Europe’, and keep their Euro currency – until now goals they have been strongly supporting.

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