And so the Greek tragedy that continues to play out in the meeting rooms of the European Central Bank grinds onward to the final act, and “Grexit,” Greece’s enforced departure from the euro (and possibly the European Union), looms ever closer. European Commission chief, Jean-Clause Juncker, has been quoted as saying he felt “betrayed” by Greece’s “egotism” during the failed debt talks. He then took a further swipe at Greek Prime Minister, Alexis Tsipras, and his government, by stating the people of Greece “should be told the truth” prior to a proposed referendum on July 5, intimating that their leaders have not been publicly honest about the negotiations.
Regardless of opinions, Greece will default on their loan tomorrow unless they can find the 1.6 billion euro repayment. Global stock markets believe that is unlikely, judging by their reaction today to news that the Athens Stock exchange and all Greek banks will be shut for the week and capital controls have been imposed. Today, the FTSE (London) was down 1.47%, the Dax (Germany) fell by more than 2%, and the Dow Jones lost nearly 1% in early trading. Germany’s 2 largest banks (Deutsche bank and Commerzbank) both saw bank stocks drop by over 4%.
Nobody can exactly predict the full impact of Greece’s economic woes, but it is clear that the impact will be global, as today’s trading in stocks has shown. Furthermore, if a “Grexit” is realized, how soon will it be before other economically-vulnerable European countries, eg. Spain, Italy and Portugal, meet the same fate? If you are concerned that this Greek economic tragedy is just the tip of a global iceberg, please Like & Share this post.
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