DIGEST (New York Times, Wall Street Journal, Washington Post)
As reported in the New York Times, long lines are forming at ATMs across Athens. Withdrawals per account are limited to 60 euros a day–about $66. The banks have been closed for a week now, and there’s no indication of when they might reopen. In fact, Greek banks may be afraid to open their doors because skittish depositors might try to withdraw everything they can, or risk losing it all (as many in nearby Cyprus did during its last bank crisis).
Businesses are feeling the impact, too. Customers are cleaning out stores of large appliances, which many Greeks feel may hold their value better than money. Citizens are forbidden from transferring money in and out of the country, companies are issuing IOUs and letting employees go, and tourists are leaving in droves and canceling plans.
What exactly is going on?
On July 20, Greece faces economic armageddon. That is the date it must make its next payment on billions of euro owed to the European Monetary Fund, or face de facto expulsion from the eurozone. Greece’s exit, dubbed the “Grexit,” would by then simply be a product of necessity. With no euros to pay its civil servants and pensioners, Greece would have no choice but to print its own currency, probably some new form of the old drachma. If it did so, it would place itself outside of the eurozone, with its own currency trading against the euro.
Having borrowed over 271 billion in “rescue” loans just to stay afloat, the Greek government now finds itself with only about 2 billion euros left, and according to a 10-page proposal released late last night, is asking for 50 billion more. As the Washington Post reported, the package includes billions of dollars in further austerity measures including taxes on cafes, bars and restaurants.
Without that additional aid, Greece most assuredly will miss its next payment. In fact, it already missed its most recent payment of 1.56 billion euros owed to the International