Greek Drama Takes Explosive Turn Over the Weekend

Negotiations between Greece and Euro zone lenders have taken dangerous turn over the weekend, which could threaten the very unity and integrity of European Monetary Union (EMU) going forward.

After very slow progress over the past five months, actions tempo picked up over the weekend.

  • On Saturday, surprising the lenders, in fact surprising almost everyone Greek Prime Minister Alexis Tsipras called for a referendum over the final proposal of Greek lenders. The date for referendum announced as July 5, 2015, next Sunday.
  • Mr. Tsipras asked for another bailout extension for 1 month to cover the referendum and continue negotiation. This proposal was swiftly rejected by lenders, which means the bailout expires on Tuesday June 30th.
  • Mr. Tsipras’s referendum proposal got the final nod in Greek parliament as majority of the lawmakers voted to go ahead with it.
  • European Central Bank’s (ECB) governing council decided to freeze the Emergency lending assistance (ELA) to Greek banks which made Greek banks vulnerable and close to collapse.
  • Sunday night Greek government has taken the decision to not open the banks on Monday and extend bank holiday till July 6th.
  • Capital controls are added. Daily withdrawal can be made of up to €60.

This is already creating havoc in the market. S&P future is down -1.2%. Pan European Eurostxx50 is down -4.37%.

Euro traded below 1.1 against dollar, however currently recovered trading at 1.108.

The material has been provided by InstaForex Company –