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Default: What now for Greece?
Yesterday at 22:00 (GMT) Greece officially defaulted after failing to pay €1.5bn (£1.1bn, $1.7bn) to the IMF.
This came after a frantic and late request to extend the bailout, which was subsequently refused. Unsurprisingly Greece are the first country to fail to repay the IMF, meaning they are now technically in default. Default being the failure to repay a loan at an agreed and specified time.
So what next for Greece?
Default for Greece has been on the cards for a while now, but what does this mean for Greece and Europe? Here are the key dates to watch out for:
1st July – ECB officials will meet to discuss granting Greece an emergency loan package.
5th July – Greek Referendum on the Creditor’s proposals will take place.
10th July – Payment of Short Term Treasury Bills due (€2bn)
20th July – Payment of ECB Loan (€3.5bn): comprised of bonds held by the ECB & the national central banks from 2012.
Out of the dates above, the most important date to look out for will be Sunday’s referendum. The Greek populace will be asked to approve or reject the creditor’s most recent terms laid out in it’s deal:
“Should the agreement plan submitted by the European Commission, European Central Bank and the International Monetary Fund to the June 25 eurogroup and consisting of two parts, which form their single proposal, be accepted? The first document is titled ‘Reforms for the completion of the Current Program and Beyond’ and the second ‘Preliminary Debt Sustainability Analysis’.
I think you’ll agree, for anyone who hasn’t got a degree in Economics or a strong grasp on the Greek Debt crisis, the lay person is going to have a job to know what that is asking of them. The BBC have an excellent article on this: “The Greek referendum question makes (almost) no sense”. For an explanation on the Greek Crisis and default, view our article: Greek Debt Crisis Explained: Top 5 things to know and key dates.
Verdict:-Sunday’s vote will determine what will happen to Greece. If they vote no, Greece will almost certainly be heading for the Grexit. If they vote yes, it wouldn’t be unsurprising to see the Greek Government do a U-Turn and a lot of the faces (Tsipras & Varoufakis) currently in the Greek Government will be ousted. Greece, as they have been for much of this year and last year, are at the centre of European economics. Roll on Sunday.
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Article by Michael Cooper