Greece’s debt crisis has reached a dangerous new phase as banks have closed their doors and ATM withdrawals have been limited to only 60 euros per day. Residents are stammering to adjust to the withholding of their money as the global market shudders at Greece’s crisis.
According to the New York Times, Wall Street faltered at the news of Greece shutting down their banks for at least a week, leaving pensioners and other residents left without access to their money, except for the meager €60 daily limit allowed at the ATMs. The Dow Jones was down nearly 1.3 percent, as was the S&P 500. The NASDAQ was down nearly 1.5 percent as a result of the crisis.
The global worry occurred after Prime Minister Alexis Tsipras called a referendum on July 5 to discuss whether he would accept the tough terms of international creditors or not. Since Greece’s debts have found their way into international news, many creditors have worried if Greece will fall under default.
Despite the lack of rioting in the streets and other signs of widespread panic, many of Greece’s residents are concerned whether the money they have kept in the banks is safe. Many pensioners and other residents that depend on bank withdrawals to feed and care for themselves have been left wondering what they will do to survive, or if their pensions will continue.
Alastair George, the chief strategist at Edison Investment Research, shared that Greece is rapidly approaching the “worst-case scenario,” according to USA Today.
“With negotiations halted, the Greek situation has rapidly moved to the worst-case scenario and investors who jumped to the conclusion last week that a deal was done will be suffering significant losses.”
Eurozone officials are optimistic that there is plenty of time before June 30 for Greece to reach an agreement with its creditors. However, the brash decision to halt negotiations until five days after the deadline could force stricter payback terms and conditions, or a complete fault on all loans. Jean-Claude Juncker, president of the European Commission, shared that they have worked diligently to assist Greece, and closing the banks and halting negotiations was unwarranted.
“We moved mountains until the very last minute when the Greek authorities closed the door.”
Despite the halt in negotiations, Athens is required to make a loan payment on June 3o. It is unclear whether Greece intends to make that payment on schedule.
[Photo by Milos Bicanski / Getty Images News]