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Greece debt crisis: the five things we learned in the run-up to the deadline
Greece debt crisis: as it happened
(about 17 hours later)
The deadline for Greece’s bailout expires on Tuesday at the end of the business day and it will owe €1.5bn to the International Monetary Fund (IMF). Even if a deal is arranged, the Greek government will not have enough time to pass all the economic reforms necessary to secure another €7.2bn in bailout funds. Here is what we have learnt in the past few days:
Time has run out for Greece to meet its deadline to repay the International Monetary Fund €1.6bn by June 30.
1. The banks are shut but people in Greece are still allowed to withdraw their money.
Even if a deal is agreed today, there would not be time for the money to be transferred.
Capital controls are in effect and so individuals with domestic accounts are allowed to withdraw a maximum of €60 a day and officials say there is no limit on the amount that can be withdrawn by foreign accounts. People can also still pay their bills online.
Attention has turned to whether the failure to pay constitutes a default and whether a default could lead to Greece's exit from the euro.
2. It has got the financial markets worried.
Greece threatens legal action to block its exit from the euro
On Monday, share prices across the eurozone fell as investors showed their concern that Greece had decided to close its banks for six business days. In London, the FTSE 100 exchange fell by 150 points, more than 2 per cent. Exchanges in German and France fell by 4 per cent.
Greece will have to leave euro if it votes no in referendum
3. David Cameron used the crisis to drive his own agenda.
Athens has just one day to find €1.6bn as it edges nearer euro exit
During marathon crisis talks last week, David Cameron attempted to use a break in proceedings to talk about Britain’s continued EU membership. The move has been met with derision however, when it emerged that the talk with the assembled leaders was very brief and the French president, Francois Hollande, apparently popped out to the loo.
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4. The finger pointing has already begun.
What are capital controls and how do they work?
Jean-Claude Juncker accused Alexis Tsipras’ government in Athens of “egotism” and appealed to the Greek people to defy the stance of their government when they vote in the referendum on 5 July to say whether they accept the conditions of a bailout.
Alexis Tspiras, the Greek prime ministers, has put in place capital controls to restrict the movement of cash in Greece and stop the banks from collapsing. Greeks are still able to withdraw a maximum of €60 a day and officials say there is no limit on the amount that can be withdrawn by foreign accounts. People can also still pay their bills online.
5. People are lining up to say that Greece is about to leave the EU.
Nonetheless, share prices across the eurozone fell on Monday as investors showed their concern that Greece had decided to close its banks for six business days. In London, the FTSE 100 exchange fell by 150 points, more than 2 per cent. Exchanges in German and France fell by 4 per cent.
On Monday morning, an economist said that if a gun was put to his head, he would say that there was an 85 per cent probability of Greece being forced to leave the EU in a few weeks’ time. Elsewhere, William Hill has closed its books on whether Greece will be the first country to leave the EU, with odds at 1/3.
