Greece have announced that their banks will stay closed all week for a total of six days following the refusal from the European Central Bank to offer emergency funding.
As the deadline looms on Tuesday for a €1.6bn debt payment to the International Monetary Fund (IMF) – it is likely that Greece will default on the loan, as markets around the world suffer plummeting stocks due to the ongoing crisis.
Over the weekend Greek Prime Minister Alexis Tsipras shocked European policy makers by announcing the country will hold a referendum on whether to accept the terms of Greece’s creditors to unlock desperately needed financial aid.
It now looks almost inevitable that Greece will default on a €1.54 billion ($1.69 billion) payment due to the International Monetary Fund on Tuesday. Much is at stake beyond the IMF’s balance sheet. What happens to Greece itself? What happens to the euro, a purportedly unbreakable currency union, and the Continent’s attempt to recreate itself as a global economic superpower? What happens in the capital markets, which have feasted on cheap debt and assumed all risks were contained?