A closed bank in Athens on Friday. Whether they will open on Tuesday again?
Greece has decided – and the more clearly than many had expected. With more than 60 percent of Greeks have rejected the reform imposed by the creditors in their referendum on Sunday. “Democracy can not be blackmailed,” triumphing Alexis Tsipras. But as of today is the economy in the country is facing enormous problems.
“autorTxt” Author: Patrick Bernau, Managing Editor of Economics Online.
Banks has been going on Monday out of money – claims to They could not even pay the current 60 euros a day.. To change that, they call for new emergency loans from the European Central Bank (ECB) – but whether the consents after the “No”, is questionable. On the contrary, the ECB would have more and more reason to emphasize the old emergency loans. On Monday, the Governing Council shall take the next decision. It is expected that he lets the aid loans on old level. Then the ATM threaten soon to be empty. Already the change is scarce in many places.
The state must repay loans. On Friday Greek government bonds maturing. According to the rules of the euro rescue fund of the Greek government is already bankrupt. If the state does not repay the government bonds on Friday, the bankruptcy comes under the rules of international financial markets.
How should the state pay pensions and salaries? Even for Finance Minister Yannis Varoufakis must come up with a solution. In recent weeks, was often speculated about IOUs that could be for a parallel currency to the euro. Varoufakis expressed not clear on Sunday night. “If necessary, we will parallel liquidity and IOUs modeled after California’s output in electronic form. That we should have done a week ago, “Varoufakis is the British” Telegraph quoted “. But in the evening he tweeted too, Europe will not allow a parallel currency.
The supply of medicines and other goods could be just payments abroad are difficult for private -. Even small payments for iTunes often fail. Anyway, the state has no money. For days, the supermarket shelves are empty slowly. Hoarding could strengthen the constraints in addition. The government needs to think about how it ensures the supply.
Greece wants debt relief
“Humanitarian assistance” urges since even the President of the European Parliament, Martin Schulz. The Greek government, however, announced that on what they promised their citizens before the vote: new negotiations. With the popular vote in the back hopes Prime Minister Alexis Tsipras on a new concession of its creditors. First impressions According to the voters who believed him and that’s why voted “no”. Has published since the International Monetary Fund last week’s “debt sustainability report”, the Greek government sees this as an additional argument anyway for debt relief.
What happens now with Greece?
Chapter 1: Together everything is better
Chapter 2: End of euphoria
With the outbreak of the financial crisis in 2008 and a general recession, the situation in Greece worsened. The end of April 2010, the government formally applies grants. EU, European Central Bank (ECB) and the International Monetary Fund (IMF) to approve loans under strict austerity measures. The years that followed are a constant back and forth. Greece needs money again, the reforms are implemented in part, for the lender but not sufficient. Debt shall be adopted. The economic situation of the country is still getting worse, unemployment shoots up.
Late last year, the then Greek government calls new elections, because they can not agree on a new budget for the country with the donors. The EU warns of such elections, because the radical left Syriza party, which defends itself against the austerity requirements of EU, ECB and IMF could win.
Chapter 3: wishes are fulfilled
The mood in Greece is at the beginning of this year so bad that’s exactly what happens. Prime Minister Alexis Tsipras and Finance Minister Yanis Varoufakis be selected and realize many of their election promises immediately. Make official dismissed again, increase the pensions and open up the closed system of public broadcasting again. That costs a lot of money that Greece has not, but this is lead until the middle of the year to serious problems. On this June 30 namely runs from the second rescue package for Greece. The country then must operate, what it is not able without new loans a loan from the IMF. The Greeks begin to withdraw money from their accounts.
In recent weeks there for this period repeatedly crisis summit, even at the technical level with the finance ministers of the euro zone, even the leaders. Lange sees it, despite many delays of as if you look at some kind. While the financiers and Greece argue over whether the country should above all by an increase in income, for example through an increase in VAT, or by cuts, as a reduction in pensions achieve reform conditions of donors. The financiers call for these cuts forcing Greece Bucks. Most observers assume, however, that will be agreed in late night sessions just before the deadline once again to a compromise. The European Central Bank bridged the financing difficulties of Greece at this time with emergency loans (Ela). The Greeks raise more money from their accounts.
Chapter 4: Escalation
But then the situation escalates end of the week. Alexis Tsipras calls for many observers and participants totally unexpected from a referendum on the austerity proposals of donors. The people should decide whether it wished to accept the terms of donors or not. The Greek Government has positioned itself clearly and is calling on voters to vote against the proposed reforms. Again and again was thought in the past about such a referendum, but so precipitously no one expected it.
With this referendum is on the one hand clear that until June 30, no agreement can be reached, because the vote is expected until next weekend take place. On the other hand, the Greek Government EU, ECB and IMF alienated so that Greece is excluded from the negotiations. Tsipras requested an extension of the utility until the referendum, but the donors refuse. The fronts are so hardened than ever. The Greeks are trying as much money as possible to withdraw, it formed queues at ATMs.
The announcement of the referendum takes many steps to be. The European Central Bank does not increase its emergency loans. Since Greece has almost exhausted this credit line, the country is no longer manage to connect with new money. The government announces capital controls and closes the banks. The Greeks are likely to stand out since only 60 euros a day at the ATMs and transfer only within the country money. On June 30, the Greek government uses their credit at the IMF not and is now officially in default.
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Chapter 5: And now?
The Greeks have surprisingly clearly decided in their referendum against the reform plans of the donors and their own government initially strengthened the back. What will happen in the coming weeks, is now the big question. Will Greece go bankrupt within the euro or running it on a Grexit addition? If there is a haircut? As the country gets new money and how it works in the long term with the Greek government on? In the ever-changing situation, hardly anyone wants to define a safe solution more. Only one thing seems certain: Nothing is excluded.
However, the creditors have voters at home. And insist on reforms. Tsipras had “torn last bridges over the Europe and Greece were able to move towards a compromise,” complained in the evening Sigmar Gabriel. “ With the rejection of the rules of the euro zone, as the majority-No is expressed, negotiations on multibillion dollar programs “Euro group chief Jeroen Dijsselbloem says,” are hard to imagine. This result is very regrettable for the future of Greece “
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New negotiations are, however, recognized. On Tuesday meet only the euro zone finance ministers, later the leaders of the euro countries. The rhetoric of the creditor, however, has not previously been amended. Euro group chief Dijsselbloem says: “In order to recover the Greek economy, serious measures and reforms are inevitable.”
All the latest updates can be found at any time in our live blog.
Monday, July 6:
- The Governing Council shall consider the “Ela” -Nothilfen for Greek banks
- chancellor Angela Merkel meets French President Francois Hollande.
- Greek banks comes after details of top bankers out of money.
Tuesday, July 7:
- Greece banks and the stock market should, according to original schedule reopen
- Meet the Euro Group (finance ministers of the euro countries) and the leaders of the euro countries
Friday, 10 July:
- government bonds in the amount of 2 billion euros are due
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