Greek Crisis - what you need to know
Published 12/07/2015 | 07:00
What you need to know
Q: We’ve been hearing about this so-called Greek crisis for ages. What’s the latest?
A: In many ways today is D-Day for Greece. Crisis talks aimed at agreeing a third bailout for the Mediterranean country were adjourned just after midnight without agreement.
There is still no deal for Greece and the situation is extremely serious. So much so that there are three critical meetings today, involving both the Eurozone finance ministers and heads of state, including our own Taoiseach Enda Kenny. We are in store for a long day and the clock truly is ticking!
Q: What happens if no deal is struck on Sunday?
This is a scenario Greece is desperate to avoid. An emergency line of funding from the European Central Bank (ECB) could be cut off and Greece would effectively crash out of the euro.
For its banks, it could spell chaos. For its people, it would be devastating and potentially plunge the country into further disarray. That’s why a deal in some form is essential, otherwise the financial markets could react in a volatile manner.
Q: So, it’s all about what goes on in Brussels?
A: That’s right. Greece’s new finance minister, Euclid Tsakalotos will attend talks at 11am Brussels time with his counterparts. The aims of this meeting is to agree a text that will be presented to the heads of state at a meeting at 4pm. If no text is agreed, it is very difficult to see how a Grexit can be avoid.
Q: But isn’t it always the case that a last minute deal is struck? Surely the likes of Germany won’t allow Greece to crash and burn?
A: That’s where you’re wrong. The most serious level of resistance to a deal for Greece is coming from German Finance Minister Wolfgang Schäuble. The senior German politician is playing hardball and he’s not the only one. Finland, Portugal and Slovakia have also raised deep concerns. As a European Commission official said last night:”Division is in the air.”
Q: Where does Ireland stand in all this?
A: Ireland wants to see this saga resolved and resolved quickly. But in fairness to Michael Noonan, he sent a warning to Greece that they must rebuild the trust that has been seriously damaged by the performance of Syriza in recent weeks.
Q: So if a deal is done, will it involve a debt write-down for Greece?
A: It’s unlikely. At present, the deal appears to be a significant restructuring of the country’s debt in return for a suite of austerity measures , some of which must be implemented from next week?
Q: Right, let’s cut to chase. Will Greece be in the Eurozone on Monday morning?
A: That’s the million dollar question.