The games are as good as over yet for Greece with last minute deals being made and lenders refusing to accept anything less than payments. Mario Draghi and his ECB are not delighted by the weak Euro but they have no tools or liquidity to offer the Greeks. Germany is likewise unlikely to help the situation.
The Grexit is near and most banks and the stock market remain close this Monday the 29th of June 2015. Reports on Twitter are reporting drained ATMs in the Greek capital.
Traders have for weeks now positioned themselves against the Euro and now government officials are likely stepping in arranging short targets with China and Japan indicating that downside risks are in aim and hampering efforts on inflationary targets.
Greece has lost the confidence of debtors when it attempted to remove itself from responsibility against Germany held debt by setting of debt commitments against war crimes from WW2 in an attempt to avoid payments. Greece also voted in a revolutionary left government and was expecting change but financial realities forced the new government to return to the right as the prior government.
It was easy to win votes and ultimately the election during such a vulnerable time by pushing positive agenda and leftist remarks. But as the previous opposition, now in government, realised the genuine financial pressures on the government from its debtors. Prime Minister Alexis Tsipras has called for a referendum on the payment schedule and seems to have turned far right, in economic references, since winning the elections.
A default by Greece would mean the imminent recession in Greece and exit form the Euro trade zone. Whilst we have seen Argentina recover from similar conditions in the past decades – the journey of recovery is a prolonged proposition. Greece’s fait will be decided on this Tuesday as payments to IMF are due for a combined €1.55b.
Europe is likely to see parity to the USD in its currency by the end of the month should Greece lead into default.