Greece Debt Crisis Puts Euro, EU In Peril

[Webster]

Los Angeles Times: Greece Debt Crisis Puts Euro, EU In Crisis

As the Greek debt drama hurtles toward a nail-biting climax, fears are mounting that the outcome could sink not just Greece but also the euro and the idea of the European Union itself.

Athens is dangerously close to bankruptcy after days of fruitless negotiations with international lenders over a new bailout package to keep it afloat. A Greek collapse could leave European leaders scrambling to prevent turmoil from spreading to other vulnerable Eurozone countries such as Italy and Portugal.

On Sunday night, Greek officials announced that Greece’s ailing banks would be closed to prevent a further hemorrhage of cash from the financial system, after the pullout of billions of euros by worried depositors in recent weeks.

The country's banks will be shut through July 6, although officials could shorten or extend that term, and ATM withdrawals will be limited to $66 a day, according to the Associated Press. People with cash and credit issued in other countries are exempt from the withdrawal limit, the AP said. The turmoil caused the euro’s value to drop sharply in early trading in Asia on Monday.

In a brief television address — his second in less than 48 hours — Prime Minister Alexis Tsipras assured his compatriots that their savings and pensions were safe. But the extraordinary step, following an emergency Cabinet meeting, sent residents scurrying to join long lines at ATMs, some of which were empty.

Tsipras blamed the situation on Greece’s creditors for refusing to extend his country’s current bailout past its Tuesday deadline — the latest verbal volley in what has become a high-stakes game of chicken between Athens and fellow members of the 19-nation Eurozone.

Without a new funding deal in place, Greece will almost certainly fail to pay the $1.8 billion that is due the International Monetary Fund on Tuesday, becoming the first developed country to default on an IMF debt.

That could cause Greece to crash out of the Eurozone, an unprecedented step whose potential consequences have officials and investors on edge.

In such an event, the Greek economy would be thrown into chaos as the government imposed heavy capital controls, rushed to reintroduce the drachma and tried to placate angry citizens and businesses whose savings suddenly plummeted in value.

Finance officials are hopeful that they could contain the fallout and keep borrowing costs for bigger countries such as Spain from rising to unsustainable levels. But even if they succeeded, the damage to the euro’s credibility as a safe currency — and to the EU’s cherished ideal of “ever closer union” on a continent torn apart by two world wars — could be irreparable.

“The objective of the euro was to deepen economic integration between member states, foster a closer common polity and European identity,” said Simon Tilford, deputy director of the Center for European Reform in London. “It has not done any of those things. It has actually undermined all those things. Forcing Greece out will only exacerbate that damage.”

European leaders are eager to avoid a potential doomsday scenario. President Obama has also weighed in: The White House said the president and German Chancellor Angela Merkel agreed in a phone call Sunday that “it was critically important to make every effort to return to a path that will allow Greece to resume reforms and growth within the Eurozone.”

-Read more: http://www.latimes.com/world/europe/la-fg-greece-banks-crisis-20150628-story.html#page=1
....thoughts?

 

[DrLeftover]

Question.

Just in the last, say millennium or so....

When hasn't Greece been a hells-broth of social, political, and economic problems of its own making?

 

[WHO IS SERAFIN]

This world is so fracked up it needs a collapse to bring people back to reality. Let the world wide economy crash begin.

 

[Webster]

Question.

Just in the last, say millennium or so....

When hasn't Greece been a hells-broth of social, political, and economic problems of its own making?

This world is so fracked up it needs a collapse to bring people back to reality. Let the world wide economy crash begin.

@DrLeftover : Good question...
@TRUE LIBERTY: Yeah, the world is fracked up...unfortunately, one country has an economic heart attack, the rest of the world gets affected in turn.