Greek Debt Crisis: Greek banks have closed!

Greek banks are closed all week, due to a dramatic turn in the countries debt crisis. The country’s government implemented capital control, a daily allowance of only 60 euros at the ATM. Many elderly Greeks do not have cards to access the ATM’s so many people trying to access their pensions cannot. They are cut off from their money.

“I don’t have a card. I don’t know what’s going on. We don’t even have enough money to buy bread”, said a 74-year-old Anastasios Gevelidis.

Last Friday, after Greece’s proposal to its eurozone creditors was shut down, Prime Minister Alexis Tsipras made the surprising decision to hold a referendum so that the entire country could decide. The referendum is set to be held on July 5, which is already pushing Greece’s luck due to that the  deadline for the IMF repayment and the deadline to make a deal with it’s eurozone creditors are both June 30th.

It seems certain that Greece will not pay its debts by June 30th, however it is unlikely that it’s creditors will not extend time to make a deal over a week late referendum. Greece’s European creditors do not want a Grexit as much as anyone in Greece would. Analysts expect that this is the final stage of negotiations of Greece’s bailout deal.

The postponed deal has created a ripple of negative impacts on the global market. Ever since Greece closed its banks, and its markets, the European stocks have started to plummet. Germany’s DAX fell 2.4%. Frances CAC 40 slipped 2.9%. Spain’s Ibex dropped 3.5%. The UK’s FTSE 100 dropped 1.4%. Worst of all, Italy’s FTSE MIB dropped 3.7%.

The referendum will vote on whether or not Greece should accept it’s creditors deal for the bailout. A no vote is likely to mean that they will not be able to pay its debt’s and probably resulting in a Grexit from the euro.

“I’d like to as the Greek people to vote Yes. … I very much like the Greeks, and I’d say to them, You should not commit suicide because you are afraid of death”, said European Commission President Jean-Claude Juncker.

A Grexit is likely to be a malignant problem for the global economy. It would evidently be the first exit from the Euro, and could influence another.