Greece's future in balance as creditors reject aid extension

[Lite Beer]

Greece's future in balance as creditors reject aid extension
RAF CASERT, Associated Press
ELENA BECATOROS, Associated Press

BRUSSELS (AP) — Greece is one big step closer to falling out of the euro currency union after its fellow member states refused to extend its bailout program past Tuesday, leaving the country on the brink of financial chaos.

After five months of fruitless negotiations, relations between Greece and its creditors crumbled further Saturday after Prime Minister Alexis Tsipras stunned them by calling for a referendum on the proposed reforms needed to get bailout loans.

The radical left-wing leader accused the creditors of using blackmail and ultimatums against his proud but struggling people. European officials called his move for a vote a foolish and rash gambit that effectively ended negotiations to keep Greece financially afloat.

In the streets of Greece, worried people queued outside banks for cash from dawn to dusk amid the uncertainty, after billions of euros had already been emptied in the preceding weeks.

Greece has a 1.6 billion euro ($1.8 billion) debt due on Tuesday and its bailout program expires the same day, after which it is unclear how the country might survive financially.

Greek Finance Minister Yanis Varoufakis left a eurozone finance ministers' meeting after his request for a one-month extension to the bailout program had been refused. The other 18 finance ministers then huddled without him to assess how to minimize the damage from the Greek crisis on their currency.

"Our institutions are and will be prepared to take any action if needed," said top eurozone official Jeroen Dijsselbloem of fears that financial turbulence might extend to the rest of the currency bloc. Fellow ministers spoke candidly about the risks of a Greek exit from the euro in a way that would have been inconceivable only weeks ago.

The ministers stressed Greece remained in the eurozone for now, and Dijsselbloem said "the eurogroup stands ready to reconvene to take appropriate decisions where needed, in the interest of Greece as euro area member."

With high anxiety gripping Greece, parliament prepared for a vote on its July 5 referendum round midnight, 24 hours after Tsipras surprised just about everyone by announcing the vote.

Without a bailout program extension or more loans from creditors, Greece is likely to be in arrears on a debt payment due the same day. Its banks face the risk of collapse.

"The Greek authorities have asked for a month extension. But in that month there can be no disbursements," he said. "How does the Greek government think that it will survive and deal with its problems in that period? I do not know," Dijsselbloem said.

Upon leaving while his counterparts continued talks, Varourfakis said "it's a sad day for Europe but we will overcome it."

France's finance minister, Michel Sapin, stressed that a deal was still possible and that he was ready to act as a go-between among Greece and the creditors after relations neared a breaking point.

Dijsselbloem refused to slam the door full shut. "The door is open. It was not the institutions that walked away from the last talks last night."

Now much will depend on whether the European Central Bank will accept to continue to prop up Greek banks even after the country's bailout program expires. It would be under huge pressure to stop using eurozone taxpayer money to keep alive the banks if there is no prospect for a deal.

The eurozone finance ministers suggested Greece should take steps to stabilize its financial system — code for putting limits on cash withdrawals and money transfers.

If Greece's banks collapse, the Greek government would have to support them itself. Penniless, the government would have to revert to printing a new currency, effectively drawing the country out of the euro union.

The governing council of the ECB will meet "in due course" to assess the situation, most likely Sunday, officials said.

The Greek government said it would recommend Greeks vote "no" in the referendum, but Varoufakis noted "the high possibility that the Greek people will vote against the advice of the Greek government."

What would happen in that case — whether Greece would have to leave the euro or try to renegotiate more time with creditors — is unclear.

An exit from the euro would put Greece through a new era of economic pain. With the new currency less valuable than the euro, the government would have to write off a chunk of its foreign loans — mainly owed to eurozone countries — and many companies and households would go bankrupt. Experts predict a long and deep recession in a country that has already been through five years economic depression.

The uncertainties of all this would roil European and global markets, though experts are divided on the extent. Some say Europe is better equipped to handle a Greek euro exit, but others say it is unclear what might happen. The euro dropped in value slightly on international markets after the referendum was called.

___

Thanassis Stavrakis and Paris Ayiomamitis in Athens, Greece, and Derek Gatopoulos and Lorne Cook in Brussels contributed to this report.

-- (c) Associated Press 2015-06-28

[konying]

While in the mean time Austrians want out of euro and started to collect 100 000 signatures needed for parliament to vote.

Seems EU is about to fall into a chaos.

Greece , Austria, most likely Portugal and Spain to follow.

[Credo]

The countries that are solvent, such as Germany, should have left the Euro long ago and started forming their own economic union. Leave the others to learn some hard lessons on their own.

[ezzra]

Look like the days of Sun, Souvlaki and flowing Ouzo are over for Greece, and that the saying you

reap what you saw never rang more true,

[godden]

The last chance saloon again!

[Basil B]

It is understood that the ECB will decide to stop lending to Greek Banks at a meeting later today.

As the ECB has been pumping money into Greece on a daily basis for weeks now to keep the banks afloat and the banks are likely to run out of money tomorrow, my guess is Greek Banks will not open tomorrow.

My question is, as Greece is part of the Euro what's to stop Greece just printing more Euros?

[Aforek]

While in the mean time Austrians want out of euro and started to collect 100 000 signatures needed for parliament to vote.

Seems EU is about to fall into a chaos.

Greece , Austria, most likely Portugal and Spain to follow.

Recent polls show that only about one third of Austrians would be in favor of leaving the EU, according to the Local. The idea is championed by both the right-wing Freedom Party and the Euro-skeptic Team Stronach party.

Most European want to stay in Eurozone

http://rt.com/news/270064-austria-eu-petition-exit/

I guess you are American, you don't know what you are speaking about ! even Greeks ( 70 % ) want to stay in EU

Not a chaos : Grexit is the only solution

[winstonc]

It is understood that the ECB will decide to stop lending to Greek Banks at a meeting later today.

As the ECB has been pumping money into Greece on a daily basis for weeks now to keep the banks afloat and the banks are likely to run out of money tomorrow, my guess is Greek Banks will not open tomorrow.

My question is, as Greece is part of the Euro what's to stop Greece just printing more Euros?

hahaha imagine every poverty stricken country in the eu doing that..think about it..

[winstonc]

While in the mean time Austrians want out of euro and started to collect 100 000 signatures needed for parliament to vote.

Seems EU is about to fall into a chaos.

Greece , Austria, most likely Portugal and Spain to follow.

Recent polls show that only about one third of Austrians would be in favor of leaving the EU, according to the Local. The idea is championed by both the right-wing Freedom Party and the Euro-skeptic Team Stronach party.

Most European want to stay in Eurozone

http://rt.com/news/270064-austria-eu-petition-exit/

I guess you are American, you don't know what you are speaking about ! even Greeks ( 70 % ) want to stay in EU

Not a chaos : Grexit is the only solution

not a chaos....??? the whole eu is in chaos....i guess you aint european either...

[winstonc]

The countries that are solvent, such as Germany, should have left the Euro long ago and started forming their own economic union. Leave the others to learn some hard lessons on their own.

no i think you will find the correct answer is......these sort of countries shouldnt have been allowed in ..in the first place..

[Baerboxer]

The countries that are solvent, such as Germany, should have left the Euro long ago and started forming their own economic union. Leave the others to learn some hard lessons on their own.

no i think you will find the correct answer is......these sort of countries shouldnt have been allowed in ..in the first place..

Spot on. How many of the EU members got in with false figures? Now, talking of corruption, as we like to do, time that was examined.

More countries than Greece became members by fiddling figures to show they met the criteria.

[Chao Lao Beach]

and UK referendum in 2016 to exit as well

[konying]

While in the mean time Austrians want out of euro and started to collect 100 000 signatures needed for parliament to vote.

Seems EU is about to fall into a chaos.

Greece , Austria, most likely Portugal and Spain to follow.

Recent polls show that only about one third of Austrians would be in favor of leaving the EU, according to the Local. The idea is championed by both the right-wing Freedom Party and the Euro-skeptic Team Stronach party.

Most European want to stay in Eurozone

http://rt.com/news/270064-austria-eu-petition-exit/

I guess you are American, you don't know what you are speaking about ! even Greeks ( 70 % ) want to stay in EU

Not a chaos : Grexit is the only solution

I sometimes wonder about people posting, if people like you ever think before opening mouth

For starters what difference does it make where i am from?

Secondly polls shmolls, Austrians are collecting 100 000 signatures to leave EU. This is a fact.

If they do or do not was not part of my post.

Please do try to think for the future before posting

[Ulic]

Look, with the attitude taken into meetings with the creditors it is, in my opinion this is the exact

outcome Prime Minister Alexis Tsipras wanted. He is recommending the deal be rejected. He

continues to blame the troika for Greece's financial woes. Greeks have still not made the

structural changes needed to turn the economy around 5 years after the shit hit the fan so of

course there is no economic improvement. At least when they leave and things his rock bottom,

things will be changed and improvements will happen. It will be painful but eventually successful.

Greece will have squeezed 500 billion out of the EU, the EU will have learnt an expensive

lesson, time to move on for both sides.

[wabothai]

The countries that are solvent, such as Germany, should have left the Euro long ago and started forming their own economic union. Leave the others to learn some hard lessons on their own.

no i think you will find the correct answer is......these sort of countries shouldnt have been allowed in ..in the first place..

absolutely right but spilled milk now.

[mihalis]

Shouldn't the EU be also chasing Spain, Portogalia, Italia, god, how many others who's economy are ruins.. What about discussing Germany owing Greece for world war 2 atrocities .. Seems always to be pulled back and hidden..

Euro, is a good thing, when run properly, not by greedy nations.. It seems Greece is the scapegoat for all this..

[stevenl]

Shouldn't the EU be also chasing Spain, Portogalia, Italia, god, how many others who's economy are ruins.. What about discussing Germany owing Greece for world war 2 atrocities .. Seems always to be pulled back and hidden..

Euro, is a good thing, when run properly, not by greedy nations.. It seems Greece is the scapegoat for all this..

Scapegoat? No, simply not repaying money owed.

[RickBradford]

Given that Greece is rated as more corrupt than Cuba, Ghana, Brazil and Bulgaria, the country's enthusiasm to join the European financial project, and its current problems, are hardly difficult to understand.

[MaeJoMTB]

It is understood that the ECB will decide to stop lending to Greek Banks at a meeting later today.

As the ECB has been pumping money into Greece on a daily basis for weeks now to keep the banks afloat and the banks are likely to run out of money tomorrow, my guess is Greek Banks will not open tomorrow.

My question is, as Greece is part of the Euro what's to stop Greece just printing more Euros?

I suspect the Germans get to print all the Euros.

[stevenl]

It is understood that the ECB will decide to stop lending to Greek Banks at a meeting later today.

As the ECB has been pumping money into Greece on a daily basis for weeks now to keep the banks afloat and the banks are likely to run out of money tomorrow, my guess is Greek Banks will not open tomorrow.

My question is, as Greece is part of the Euro what's to stop Greece just printing more Euros?

I suspect the Germans get to print all the Euros.

No, all countries do. And I suspect the presses in Greece are turning red hot at the moment

[Aforek]

Euro, is a good thing, when run properly, not by greedy nations..

The idea of Euro is good , most of us are attached to it !

Edited June 28, 2015 by Aforek

[midas]

How long before the derivative defaults kick in and this contagion spreads around the world ? There are $ 3.4- $ 4 TRILLION in derivatives on Greece.

[Anthony5]

EU and IMF give the Greek freeloaders another very, very, very , very ,..........................very last chance.

http://finance.yahoo.com/news/greek-parliament-gives-green-light-000712713.html

DEAL STILL POSSIBLE

The 18 other countries sharing the euro countries have blamed Greece for breaking off negotiations and pledged to do whatever it takes to stabilize the common currency area.

But some officials said there was still time to return to the negotiating table.

French Prime Minister Manuel Valls on Sunday urged the Greeks to continue talks, warning that the country's membership of the euro was at stake.

"A deal is still possible, I invite the Greek government to come back to the negotiation table," Valls told Europe 1, Le Monde and iTELE in a joint interview. "I cannot resign myself to Greece leaving the euro zone ... We must find a solution."

International Monetary Fund boss Christine Lagarde told the BBC that there was still time for the Greek government to change course.

She also said that if the July 5 vote produced "a resounding yes" to remain in the euro and fix the Greek economy then the creditors would be willing to make an effort.

[Basil B]

It is understood that the ECB will decide to stop lending to Greek Banks at a meeting later today.

As the ECB has been pumping money into Greece on a daily basis for weeks now to keep the banks afloat and the banks are likely to run out of money tomorrow, my guess is Greek Banks will not open tomorrow.

My question is, as Greece is part of the Euro what's to stop Greece just printing more Euros?

I suspect the Germans get to print all the Euros.

No, all countries do. And I suspect the presses in Greece are turning red hot at the moment

I thought like the coins all bank notes would have one side that differs dependent on which country issued them but that's not true, it is the prefix letter and Greece uses the letter "Y" so if you have a stash of 500 Euro notes with the Prefix "Y" maybe time to change them.

But do not worry it is highly unlikely there will be an issue with notes printed by Greece, I presume there is some form of audit to check that no country prints more notes than it is allowed buy checking the serial numbers, if Greece was to which is highly unlikely then notes with a Y prefix may not be accepted by other European countries.

It seems the ECB is now not pulling the plug on Greece today... but ECB has stated it is not raising the cap on aid to Greece, not clear but maybe Greece has got all the 89 Billion Euro loan, so maybe no more tomorrow.

What next? I was thinking Greece was done but seems no one wants to pull the pug on the life support, so this may go on for a lot more longer, maybe an orderly leaving of the Euro and no more credit.

Edited June 28, 2015 by Basil B

[Basil B]

Just flashed up "Greece's bank to stay closed tomorrow" as announced by the Greek Government.

Wonder how long the the ATM's will keep working for?

[Maestro]

...

My question is, as Greece is part of the Euro what's to stop Greece just printing more Euros?

The answer is that Greece has never printed any euro and never will print any, unless they want to print fake money.

[smedly]

quote ............Greek banks are to remain closed and capital controls will be imposed, Prime Minister Alexis Tsipras says..............

was that part of your election manifesto ????????? I think not, if I have money in a bank for safe keeping I expect to be able to withdraw it at any time, give me my money

I can remember a long time ago when I used to get my money paid to me in cash - the world changed for the worst when we where forced to take in cheque and then eventually some months later - direct to a bank

All you people that are still working - try getting a job or getting paid if you don't have a bank account - if the people want to revolt against the system then insist on cash only............sorry I don't have one of them bank account things .......oh how the world changed when cash disappeared

[Mosha]

quote ............Greek banks are to remain closed and capital controls will be imposed, Prime Minister Alexis Tsipras says..............

was that part of your election manifesto ????????? I think not, if I have money in a bank for safe keeping I expect to be able to withdraw it at any time, give me my money

I can remember a long time ago when I used to get my money paid to me in cash - the world changed for the worst when we where forced to take in cheque and then eventually some months later - direct to a bank

All you people that are still working - try getting a job or getting paid if you don't have a bank account - if the people want to revolt against the system then insist on cash only............sorry I don't have one of them bank account things .......oh how the world changed when cash disappeared

As the Cypriots found out. It's no longer your money while it's in their "safe keeping".

[MAJIC]

Dear dear what is this Referendum nonsense all about i.e are they voting Greece a Bankrupt Nation, voting to request a bail out,or voting to pay off their debt, who have overspent,and now they have to pay the piper.So now has come the inevitable pay back time,Greece has the answer,forget we overspent,and squandered our budget and give us the bail out deal that's suit us,otherwise we will try and bring down the EU,Greece is not thinking about what they owe the EU, only the possible Freebies tied to them on the next possible pay out,(which will surely come)

Greece, one of the tiniest contributers to the EC budget, has now resorted to Blackmail!.......what a P*** Take!

Kick em out of the EC! We lived without them before they joined the EC,so bye bye!

Edited June 28, 2015 by MAJIC

[samuibeachcomber]

This game of poker is still in play.

If the greek politicians were serious they would now be printing drachma's.

I think they are too lazy to do this,and would not cope well with running things without the EC holding their hand.

Meanwhile its the ordinary citizens who take the pain