Greece controls against default – Aftenbladet.no

(See subtitled interview with Greece’s finance minister at the bottom of the case)

– No.

The message was short and sweet from Finance Minister Yanis Varoufakis Tuesday. Greece did not come to meet installment of around EUR 1.6 billion to the International Monetary Fund at maturity that night.

– This means in principle that the breach will affect Greece’s creditors. Breach occurs at the moment one has not made up for themselves, said analysis manager Pål Ringholm in Swedbank.

Greece loses all credibility with the IMF and other lenders. But in practical terms will not be as big consequences immediately, he said.

– It’s still July 20, is the most important date, says Ringholm said.

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Unrest

This is the date when Greece have to pay 3.5 billion euros to the European Central Bank ECB.

– If they do not pay this, we are talking about a real default on all debt, says Ringholm, and this outlook creates turmoil in world stock markets.

With arrears in IMF are Greece with a little coveted club of country who fail to comply with their obligations, even if it does not send the country directly out of the eurozone.

But the European loan program is matter over at midnight Tuesday, and Greece are then without a safety net for the first time in five years.

– At midnight expiring program. I know of no real indication of something else, said Germany’s Prime Minister Angela Merkel on Tuesday afternoon.

Eleventh hour

Greece broke Friday night negotiations with creditors in the EU and IMF on how the loan program can extended in exchange for reforms and cuts. Greeks will instead hold a referendum on the creditors’ conditions Sunday.

The European politicians have yet not completely given up hope of a solution at the eleventh hour, and Greece and lenders are constantly in touch.

While Greece proposes a new, two-year deal with the eurozone’s rescue fund ESM, the European Commission chief Jean-Claude Juncker promoted Friday’s proposal five months extension anew towards Athens.

Juncker will also have Prime Minister Alexis Tsipras to ask voters say yes in the referendum. But the Financial Times believes some u-turn from the Greeks is not likely.

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Debt

The Greeks also requests a restructuring of the country’s enormous debt.

– Greece is at the negotiating table. The Greek government is going to work for a viable solution, which has as its ultimate goal that Greece remains in the eurozone, says the government in Athens.

Although Greece have placed themselves in the difficult situation, must a realistic, long-term solution also involve a deletion of part of the debt, says Ringholm.

– It is difficult to understand why no EU can realize this, he said.

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Central Bank

While the politicians bicker, is the Greek economy’s fate now in the ECB’s hands. Wednesday gathered the central bank’s management to consider emergency loans to Greek banks. About it will tighten the tap, it is fast end to the Greek banks’ liquidity.

Sun, the Bank adopted to extend but not expand, the supply of credit. The result was the Greek capital controls.

– Everything hangs on the referendum, says economist Jörg Krämer at Commerzbank said.

If Greeks vote no when, he believes the ECB will have to close the tap completely.

– In practice this will mean the end of euro membership to Greece, he said.

Finance Minister: The proposal is not viable

Greece’s Finance Minister Yanis Varoufakis about the situation in Greece, the referendum and the way forward.