Germany awaits GREXIT
Greece Orders Banks Closed, Imposes Capital Controls to Stem Deposit Flight
Excerpt:
In Germany, which is Greece’s biggest creditor, Sunday newspapers led with headlines such as “Game Over?” and the word “Exit” in ancient Greek. Leading politicians who had called for leniency with Athens in the past voiced fury, and many conservatives said it was high time for a Greek exit from the euro to be prepared.Comment: Image capture from German news sites.
Greece in shock as banks shut after snap referendum call
ReplyDeleteWith Greece's bailout expiring on June 30 and an IMF payment falling due at the same time, Prime Minister Alexis Tsipras pleaded in vain by phone with European officials to extend the programme until a referendum on July 5 on its future terms.
The frantic efforts to secure Greece's place within the euro zone followed a dramatic weekend. Tsipras's decision, early on Saturday, to put the aid package to a popular vote took the lenders by surprise and sent Greeks rushing to cash machines.
It also pushed Greece towards defaulting on 1.6 billion euros ($1.77 billion) due to the International Monetary Fund on Tuesday, which would take it closer to an exit from the euro zone. A Greek official confirmed to Reuters that the payment would not be made.
Greeks - used to seeing lengthy talks with creditors end with an 11th-hour deal - were shocked by the turn of events. Queues snaked outside ATMs and inside supermarkets while fears of disruptions to fuel and medicine supplies grew.
Drugmakers said they would continue to ship medicines to Greece in coming weeks despite unpaid bills, but warned that supplies could soon be in jeopardy without emergency action.
The breakdown of talks has pushed the European Union and euro zone into uncharted terrain. The Athens stock exchange was closed like the banks, but other share markets fell on fears that Greece could be heading out of the euro.
The blue-chip Euro STOXX 50 index fell more than 4 percent, with bank shares down sharply. By midday, all three major U.S. stock indexes were down more than 1 percent.
"I can't believe it," said Athens resident Evgenia Gekou, 50, on her way to work. "I keep thinking we'll wake up tomorrow and everything will be OK. I'm trying hard not to worry."
After months of talks, Greece's exasperated European partners have put the blame for the crisis squarely on Tsipras for rejecting a package they consider generous. The Greek side argues that pension cuts and tax hikes demanded of it would only deepen one of the worst economic crises of modern times in a country where a quarter of the workforce is already unemployed.