Greece has
towering debt figures, the deadlines for which stretch till 2050. But Tuesday
is the deadline for when it has to pay the largest piece of the pie. Here’s
what Greece owes and when.
Little help
is in sight if Greece defaults. The IMF will be prevented by rules from
providing additional financial assistance to the Greeks if the country misses
the 30 June payment, managing director Christine Lagarde said. Moreover, Greece
wouldn’t have access to funding until it clears the debt, she said.
Meanwhile,
the people of Athens have to live under a strict regime of monetary controls.
Here is what’s in store for them over the coming days.
The lines
forming at petrol stations and in front of the shrinking number of bank
machines, which still contained cash over the weekend, highlighted the scale of
the disaster facing Greeks, who have endured more than six years of economic
decline.
The deepest
cut for the people of Greece is perhaps the fact that the last few decades of
prosperity are a mirage. In the last century, Greeks have endured servitude
under the Ottomans, occupation by the Nazis, a civil war, dictatorship and a
tenuous democracy. Now, they face a national insolvency, the bill collectors at
the door for three decades of borrowed time on borrowed wealth.
It’s not
the first time that the country is facing such a crisis. The history of Greece
is filled with major disasters and impressive recoveries. Even its birth in
1832 was a triumph over the odds, assisted by the decision of the UK and France
to come to the rescue of an independence movement on the brink of defeat.
Greece then spent half the years until 2006 in default, having had to
restructure its debts six times. Yet despite its many setbacks and
notwithstanding its present predicament, it is arguably the most successful
state to emerge out of the ashes of the Ottoman Empire.
But this
success is also due to the long-standing determination of Greeks to place their
country firmly among the family of Western European nations, which extended to
the bold decisions to join the European Economic Community soon after the
collapse of the military regime in the 1970s and adopt the euro in 2001, a year
after its launch.
It is
Greece’s European identity that is at stake in the referendum that the
government has decided to call for 5 July, says a Wall Street Journal report.
Polls show
that the Greek people favour staying in the euro, and Greece’s leaders have
said they do not want to leave the common currency. Indeed, fears of the
consequences of leaving the euro could help persuade Greece’s leftist
government to soften its stance and, at the last minute, forge a deal with its
creditors.
Greece’s 5
July referendum on the troika’s (the IMF, ECB and European Commission) last
known set of economic demands for bailout aid has stunned Greeks, baffled
Europe and threatens to put the country on a path to exit from the euro. The
vote’s outcome also risks cutting short the 40-year-old Alexis Tsipras’s
turbulent, five-month career as Greek leader.
In fact,
Greece’s creditors now say they don’t know what Tsipras wants - or more
crucially what he can deliver. It may be that he doesn’t know himself. The kind
of euro zone to which Syriza wishes to belong is one that doesn’t exist - but
which many in Syriza clearly hoped their arrival on the European political
scene would help bring about. But how this euro zone should work in practice
has never been made clear.
But the
decision to hold a referendum on the bailout terms being demanded of his
country can have a much wider impact than meets the eye. It has the potential
to be a Sarajevo moment, says a report in The Guardian . The crisis is not just
about whether there is soon to be a bank run in Greece, although there is
certainly the threat of one. It is not just about whether the creditors
overplayed their hand in the negotiations, although they did. It is about the
future of the euro itself. There will be much talk in the next few days about
how Greece can be quarantined.
The ball
now has been pushed into Angela Merkel’s court. With Greece opening a fresh
chapter of its five-year crisis by announcing a referendum on austerity, the
German chancellor and president of ECB must this week decide whether to grant
Athens the breathing space to hold that vote while ensuring that the rest of
the region is inoculated against financial contagion.
If Greece
votes in the referendum to agree to the creditors’ conditions for further
financial help, the government would have to ask for and negotiate a third
bailout programme with international lenders.
Such
negotiations would probably take many weeks or even months because they would
be even more difficult than those that broke down this weekend, officials said.
The man who
coined the term “Grexit” in February 2012 to describe the risk of Greece
leaving the euro area now thinks the country will stay after all. “We expect
the referendum to result in a comfortable majority for the ‘Yes’ camp, and
expect no Grexit this year and a lower risk of Grexit in subsequent years,”
Citigroup Inc. economists including Ebrahim Rahbari wrote in a research note
for clients on Sunday.
Whatever
the outcome of the interminable Greek crisis, it has highlighted a major
challenge for the euro zone: How does it induce a member state to pursue
policies vital not only to its own economic fortunes, but also to those of
every other country to which it is yoked?
Πηγή:
livemint.com
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