The Greek Debt Drama

The Greek debt drama continued to present unexpected twists and turns, after negotiations on structural reforms failed to reach agreement. The Greek Prime Minister Tsprias called a referendum to be held on 5 July on the creditors latest proposals, with the hope that a ‘no vote’ result would empower his bargaining position and receive greater concessions. Meanwhile the creditors suggest that a ‘no vote’ will represent a rejection of the Eurozone and will pave the way for Greece to exit the EU. Capital controls were introduced on 29 July to help stem the flow of bank withdrawls after the European Central Bank limited its Emergency Liquidity Assistance to Greek banks at €89bn. Greece is now officially in arrears, having missed its €1.6 bn payment to the IMF on 30 June, the same day that its bailout package expired.


Monday – 6 July

Greek voters rejected austerity measures demanded in return of a debt deal, raising concerns about the country’s possible exit from the euro. Economists reckon the outcome of Sunday’s referendum will probably hasten Greece’s exit from the Eurozone.

Tuesday – 7 July
France and Germany told Greece on Monday to come up with serious proposals in order to restart financial aid talks, a day after Greeks voted overwhelmingly to reject more austerity.

German Chancellor Angela Merkel and French President Francois Hollande, the Eurozone’s most powerful leaders, said Athens must move quickly if it wants to secure a cash-for-reform deal with creditors and avoid crashing out of the single currency.

Friday – 10 July
Greece has bowed before Caesar. Just two hours before a midnight deadline, the Greek delegation submitted an economic plan that just might secure them a bailout. This includes tax rises, pension reforms, privatisation and spending cuts, which basically amounts to everything the anti-reform party said they would never consider. Eurozone boffins must now read the plan and evaluate its worthiness for the empire.

Thursday – 16 July

Greece has adopted austerity measures, thereby allowing access to a critical bailout.

In a vote of vote of 229 to 64, with six abstentions, 32 members of Prime Minister Alexis Tsipras’ own party, including several cabinet ministers, voted against the measures. Tsipras left parliament right after the vote was taken. For him, the hard work might well be over. For Greeks, the hard times are now ahead, but at least with light at the end of the financial tunnel.