Greek Debt Crisis – This Is Real

For several months now the Greek government and the European Union have been doing this dance. On one hand, Greece is hopelessly in debt. On the other hand, the European Union has been imposing draconian sanctions which make it nearly impossible for Greeks to live a normal European life. Something has to give. It is unclear exactly what will happen to the US Economy as a result of this crisis. (Krugman lays out his thoughts here.)

From the New York Times:

Prime Minister Alexis Tsipras announced Sunday night that Greece’s banks would be closed as of Monday, as the fallout from ruptured debt negotiations with the nation’s creditors began inflicting pain on ordinary people while raising alarm in Washington, Brussels and Berlin.

The emergency measures escalated the confused and unpredictable state of a crisis that some analysts say could ripple through global financial markets and undercut European unity. Most Asian markets opened lower on Monday.

From the Washington Post:

“The decision not to prolong financial aid to Greece is offensive, and it’s a disgrace for Europe in general,” Prime Minister Alexis Tsipras said in a brief Sunday evening address broadcast across Greek television networks. He said he was seeking an extended and enlarged bailout from European lenders that would carry the country past Tuesday, when it will otherwise face default.

There were signs that Greece’s creditors — the International Monetary Fund and euro-zone governments — were leaving the door open to negotiations. But it remained unclear ahead of Tuesday’s IMF repayment deadline how Greece would be able to satisfactorily arrange its finances.

From the Wall Street Journal:

Greece is now cast into extraordinary uncertainty. It isn’t clear what will happen Monday when Greeks face an extended period without their money. Nor is it certain whether Mr. Tsipras can survive, politically, after his referendum next Sunday.

Now that banks have been closed, it also isn’t clear how they will reopen or, when they do, what will be the currency in their vaults and in their accounts: If Greece can’t persuade the ECB to restart emergency lending, the only practicable solution is for Greece to print its own currency so that banks can satisfy depositors and still function.

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Errington C. Thompson, MD

Dr. Thompson is a surgeon, scholar, full-time sports fan and part-time political activist. He is active in a number of community projects and initiatives. Through medicine, he strives to improve the physical health of all he treats.


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