On Sunday Greece will vote in one of the most unusual referendums to be held in Europe in a long time. With only a week’s notice the country has been asked to vote on an extremely vague question, which in essence boils down to whether or not to accept an offer by the Eurogroup (Greece’s creditors) for a new series of bailouts and reforms. The only problem is that the Eurogroup has made clear that this offer is off the table, making the actual question essentially meaningless. Continue reading
The news has just broken that the European Central Bank will agree later today to end emergency assistance to Greek banks. This, together with yesterday’s news that the EU will not extend the bailout until Greece can hold a referendum on further austerity, means that it looks very likely that Greece is about to crash out of the Euro. Let’s quickly catch up on how the negotiations fell apart, before looking at what the events of today mean, and what could follow.
The situation is still changing fast, and on the evening of the 28th of June the ECB had indeed decided to end additional assistance to Greek banks, and capital controls have been imposed. The description below of what could happen is still relevant., but actual actions taken by the ECB and government may change.
The clock is ticking down to yet another deadline in the eternal negotiations between Greece and its creditors on debt and bailouts. The deadline this time is the 30th of June, when the country owes 1.5 billion euros in debt repayments to the IMF. If they don’t pay, they will have defaulted on a loan, and that could start them on the path to economic collapse and an exit from the Euro and European Union. Continue reading