The Greek crisis

greece financial crisis

1) Greek Prime Minister Alexis Tsipras is now ready to accept most of the terms of a bailout he rejected at the weekend. But this won’t fix the crisis any time soon: That offer expired Tuesday, it will take weeks to negotiate a new rescue, and Greece may need a new government first.

2) European finance officials will meet at 11.30 am ET to discuss Greece’s desperate plea for more cash. But one official told CNN that any new rescue may require tougher conditions. Broadly, Europe wants Greece to cut the amount it has promised in pensions and raise additional taxes.
3) Greece officially missed its $1.7 billion payment to the International Monetary Fund at 6 pm ET on Tuesday. It’s the first developed country to do so. Greece has been living on borrowed money for a while now, and time has run out.

4) Global financial markets jumped Wednesday on the dramatic about-face from Athens. They were calm Tuesday despite the IMF default. That’s because most of Greece’s debt is owed to big European institutions and other eurozone countries, not banks, so default shouldn’t crash through the global financial system.

5) German Chancellor Angela Merkel said Tuesday the “door is still open for dialogue.”

6) It’s now unclear whether a popular vote in Greece will go ahead as planned on July 5. Tsipras had been urging Greeks to vote against the terms he has now largely accepted.

7) If the people vote “No,” it seems to mean that they do not want to consider a bailout. Chaos would ensue as proceedings likely begin for how to leave the euro, and return to the drachma.

8) If the people vote “Yes,” it generally means that they want to stay in the eurozone. New terms would need to be negotiated.

9) Greece has another big payment due on July 20, this one to the European Central Bank. The ECB meets Wednesday to decide how much support to continue pumping into Greek banks.

10) Greek banks are still closed. That’s to prevent people from withdrawing all their cash, which the banks couldn’t possibly honor. Daily withdrawals are limited to 60 euros, or about $67.

11) Oh, Greece is pretty much in a Depression, with the economy having dropped by a quarter in the past few years, and an unemployment rate above 25%.

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