Greece is clearly a country in crisis. Capital controls now imposed, banks shut and ATM cash withdrawals now limited – the food-stores don’t even know where they should put the day’s takings. The Greek Prime Minister, Alexis Tsipras, has called for a public referendum on July 5, in which the Greek people will decide whether to accept the bailout proposals offered by Greece’s European partners. Mr. Tsipras asked today for a resounding “No” vote in that referendum, believing that Greece’s hand in future negotiations would be strengthened. In a televised address, he said, “I want you to answer “No”…. to open up a bright new page in our history.”
Eurozone finance ministers have said that there is “no ground for future talks at this point,” even though Greece had earlier offered new compromises to their creditors. However, these compromises are directly linked to a further Greek request for bailout funds, totaling 29.1 billion euros. Eurozone ministers today insisted that any further negotiations would be “after and on the basis of” what transpires from the referendum this Sunday. Only 3 other countries have ever defaulted on an International Monetary Fund (IMF) loan as Greece has now done – Syria, Sudan and Zimbabwe. Those 3 nation’s collective debt to the IMF is 1.6 billion euros, exactly the sum Greece failed to come up with yesterday.
The word “crisis” comes from Ancient Greece, to describe a particular time in the progression of a disease – it is the point where the patient’s condition either overcomes and kills, or subsides and lets the patient live. The outcome of Sunday’s hastily-arranged referendum will give us a clear indication whether Greece lives on within the euro or not. Some financial analysts believe the euro itself is the patient fighting for its life.
Did you know that 11.3 billion euros of Greece’s total debt was loaned by domestic U.S. banks? If you are concerned how the Greek crisis will impact upon economies globally, please Like & Share this post.