Greece has submitted an 11th hour proposal for debt restructuring that includes a two-year aid proposal.
The statement came hours before Greece’s default on a loan to the International Monetary Fund. The proposal would require another bailout for Greece from the Eurozone’s European Stability Mechanism (ESM), a $560 million dollar rescue fund.
Athens has until 5 p.m. Tuesday to make a $1.8 billion dollar repayment to the European Central Bank before they are in default.
German Chancellor Angela Merkel seemed to be very cool toward Greece’s new proposal. Germany is Greece’s biggest creditor.
“This evening at exactly midnight Central European Time the program expires. And I am not aware of any real indications of anything else,” she told a news conference.
Several european leaders began to express concern that Greece may be forced out of the Euro by their default and the impact it could have on the Euro, the EU and the region.
“What would happen if Greece came out of the euro? There would be a negative message that euro membership is reversible,” said Spanish Prime Minister Mariano Rajoy to Reuters.
“People may think that if one country can leave the euro, others could do so in the future.”
European Union financial experts say that if Greece’s voters reject a referendum on the nation’s debt this Sunday it would mean the nation leaves the Euro.
Greece shut down the nation’s banks on Monday after a weekend run on ATMs caused many to run out of cash. A strict limit on ATM transactions has been put in place by the government through Thursday.
The shut down of banks and the stock markets in the nation will last at least through the Sunday vote.
Greek leadership was defiant in the fact of default and the EU no longer providing bailout funds to the nation.
“The decision not to prolong financial aid to Greece is offensive, and it’s a disgrace for Europe in general,” Greek Prime Minister Alexis Tsipras said in a national address.
The country’s poorer neighbors, however, are showing little sympathy for Greece’s plight.
“We are much poorer than the Greeks but we have performed reforms,” Rosen Plevneliev, the president of Bulgaria said. “When you have a problem, you have to address it and not shift it to Brussels or onto somebody else.”
The country’s actions have carried negative impact on world financial markets. World stock markets all took sharp dives at their openings which carried throughout the day; the euro tumbled on world currency markets.
U.S. officials are watching the economic situation in Greece with concern that it might lead to a situation where Russia could gain influence over a NATO member.
Greece, on the verge of bankruptcy, has been struggling with members of the European Union regarding debts and loans to cover costs. If Greece defaults, Russia could swoop in with economic help and turn that nation against the West.
“You can easily see how geopolitically this would be a gift to Russia,” says Sebastian Mallaby at the Council on Foreign Relations. “You do not want Europe to have to deal with a Greece that is a member of NATO but which all of a sudden hates the West and is cozying up to Russia.”
President Obama and his administration have been quietly talking with German leaders about getting the EU to resolve the standoff with Greece. Apparently the EU’s issues with Ukraine have factored into the Greece discussions.
The Greek prime minister traveled to Russia last week to meet with Russian president Putin.
Russia has been working to weaken the EU’s support for sanctions which require all 28 member nations to approve before going into effect. If Greece remains in the EU but receives major support from Russia, they could block further sanctions.
“We still believe that Europe remains united against Russia and what they’re doing,” says John Kirby, state department spokesman, when asked about the potential impact of a Greek default.
“I think coming out of the G7 you saw a lot of unity in Europe for continued sanctions against Russia and the possibility for increased sanctions to further isolate Russia.”
A magnitude 5.2 earthquake struck southern France Monday according to the French National Seismic Monitoring Network.
The quake was located near the resort city of Nice and was only 7 miles deep. A local seismic expert said that the quake should be seen as a “warning” to France.
“We don’t know when a big one will come, but it will and there will certainly be fatalities,” Remy Bossu of the European Mediterranean Seismological Center told a French newspaper. “In Italy or Greece everyone is fully aware of the risks simply because earthquakes happen more often. Everyone knows about them and it’s part of their culture, but not in France.”
Monday’s quake, which lasted 15 seconds, reportedly only caused minor damage to buildings throughout the region. Seismologists say a quake of this nature strikes France only one every 30 years.
The quake was the second surprise quake to strike France in the last six months. In November, a 4.5 magnitude quake struck in northwest France near Brittany.
A major earthquake struck western Greece on Sunday afternoon.
According to the U.S. Geological Survey, a magnitude 6.0 earthquake struck around 3:55 p.m. local time. The quake was centered about 12 miles below the town Lixouri on the island of Kefalonia. At least a dozen aftershocks of 3.5 or higher on the Richter scale have continued to shake the region.
Officials say that no one was killed in the quake but that many suffered minor to moderate injuries from objects falling in their homes. Some roads and highways had to be closed for cracked pavement or large rocks from landslides caused by the quake.
Local Greek websites are showing pictures of moderate to severe damage to old buildings around the epicenter of the quake. Residents of the areas closest to the epicenter were told by government officials to abandon damaged buildings overnight in the event of major aftershocks.
Less than a week after their Prime Minister said they would no longer take austerity measures because of an improving economic situation, Greek officials have said unemployment has reached new highs.
The debt-ridden nation’s unemployment rate rose to 26% in the final part of 2012, up from 24.8% in the third quarter of the year and 20.7% a year in 2011. Continue reading →
Greek Prime Minster Antonis Samaras has placed his country and the European Union on notice that austerity measures have ended in Greece.
The proclamation comes as Greece’s international creditors extended an audit of the nation’s finances and crisis reforms. Continue reading →
Hours of heavy rain and thunderstorms caused massive flooding in the capital of Greece.
Athens officials were forced to close underpasses and subway stations due to the massive flash flooding. The train and tram network also was forced to close due to the waters. Continue reading →
Greece, in the middle of the worst recession in the world, has had masked intruders firebomb a gold mining development in the northern part of the country with the stated goal of shutting the mining operation.
Machinery, vehicles and storage containers were damaged in the attack. Continue reading →
The Greek government has invoked an emergency power act to order sailors and dock workers to end a six day strike that has crippled traffic to Greek islands.
Workers who defy the order will face jail terms of three months to five years. Continue reading →
