Economics And Politics Economy Financial Markets

WARNING! Greece Could Collapse on Tuesday (June 30th, 2015)

Written by JayWill7497

Greece will shut its banks Monday to prevent a financial collapse after the European Central Bank froze emergency loans to the nation’s lenders.

Piraeus Bank SA Chief Executive Officer Anthimos Thomopoulos revealed the decision to reporters after a meeting of the government’s financial-stability panel on Sunday.

As he left the same session, Finance Minister Yanis Varoufakis stated an announcement would be made after a Cabinet meeting due to begin imminently in Athens.

Banks will stay shut until at least after a July 5 referendum called by Prime Minister Alexis Tsipras on whether to agree to austerity in exchange for a European bailout, Kathemerini newspaper reported, citing unnamed sources.

The European Central Bank faces what is arguably the most challenging and important decision of its relatively short existence this weekend. Customers queued for cash in Athens on Saturday outside a bank branch whose doors remained shut It matters, because Greek banks are wholly reliant on support from the ECB – which is provided via the Bank of Greece – and they would fall over without it.

The decision is hard, because some members of the ECB’s governing council will fear that it would be breaking all central banking rules by continuing to provide support. inevitable that Greece will miss the 30 June deadline for making a €1.5bn ($1.7bn; £1.06bn) payment to the International Monetary Fund, and that would call into question the solvency of the government. existing bailout programme will have expired by then.

So there would be greater doubts (if any were needed) about the solvency of Greek banks, since the Greek state is the ultimate guarantor of the banks and they own so much Greek sovereign debt. central bank is never supposed to lend to insolvent banks, because to do so would be to explicitly throw good money after bad – and would imply the central bank could be failing in its primary responsibility of preserving the value and integrity of the currency.

It all started during yesterday’s surprisingly short, just one hour long Eurozone finmin meeting in Riga, where Yanis Varoufakis not only got the most “hostile” reception yet being called “a time-waster, gambler, and amateur“, but for the first time one minister openly said that maybe it was time governments prepared for the plan B of a Greek default. This happened after Jeroen Dijsselbloem slammed the door on Varoufakis’ proposal for early cash after partial reforms. In other words, should the ECB boost the haircut on Greek bank collateral, and both a depositor bail-in and capital controls become inevitable. The radical wing of Greece’s Syriza party is to table plans over coming days for an Icelandic-style default and a nationalisation of the Greek banking system, deeming it pointless to continue talks with Europe’s creditor powers.

Europe must be prepared to step in otherwise Greek society would face an unprecedented crisis with power blackouts, medicine shortages and no money to pay for police, they said. The FOMC meeting is the most important economic event next week. The implications are much broader than the impact on the US dollar, which has surprisingly not reacted to the recent string of strong economic data. The risk of a failed state on the EU’s southern flank, in terms of the consequences for immigration, defense, and the ability to block a Russian pipeline alternative to Ukraine, would likely be more costly for Europe in the medium and long run. How should one evaluate the cost of a Russian naval base in Greece, where the possibility can only rise if it is forced out of EU and EMU. Would its NATO membership be secure?

A committee formed by the speaker of the Greek parliament and Syriza member, Zoi Konstantopoulou, has released a report stating that the debt the IMF and the Europeans insist the people of Greece owe to the bankers is “illegal, illegitimate and odious.” “Right now we are at the cusp,” billionaire George Soros tells Bloomberg TV in this brief clip, the chances of Greece leaving the euro area are now 50-50 and the country could go “down the drain.” The 84-year-old fears that talks between Greece and ‘the institutions’ could “break down,” adding that “Greece is a long-festering problem that was mishandled from the beginning by all parties,” concluding that the chances of Greece leaving the euro area are now 50-50 and the country could go “down the drain.” Finally, Soros notes, what worries him the most is Ukraine.

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About the author


Reporter, Journalist, Blogger, Researcher. Committed to providing information by posting/archiving videos, articles, and links. I also investigate to raise awareness on numerous issues, inspire critical thinking, involvement, and hopefully to help make our world a better place for all. “The truth, always the truth at all costs”

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