CRI­SIS MAN­AGE­MENT

Townsville Bulletin - - NEWS -

WHAT HAP­PENS NOW?

Greece is broke and there­fore needs Euro­pean cash if its banks are to re­open to­day af­ter be­ing closed for a week. The amount of Euro­pean Cen­tral Bank bailout money – or emer­gency liq­uid­ity as­sis­tance ( ELA) – re­ported to be im­me­di­ately re­quired is € 6 bil­lion ($ 8.8 bil­lion).

“If the ECB does not ex­tend ad­di­tional ELA it is very dif­fi­cult to see how the banks can open on Tues­day as planned and the eco­nomic cri­sis will in­ten­sify,” ANZ’s head of global economics Brian Martin said. “In the ab­sence of fresh and ad­di­tional fund­ing, the longer the fail­ure to reach an agree­ment goes on the greater the pres­sure will rise on Greece to exit the euro.”

Greece is sup­posed to make fur­ther pay­ments to­talling al­most € 3.5 bil­lion to the ECB and other in­sti­tu­tions on July 20.

WILL GREECE DROP THE EURO?

The ref­er­en­dum re­sult “sig­nif­i­cantly raises the risk of a Greek exit from the euro”, St Ge­orge Bank econ­o­mist Jo Hor­ton said. It would likely cre­ate a new drachma, but this could take six months.

WHAT WOULD IT BE WORTH?

The drachma would be de­val­ued – es­ti­mates range from 30 to 80 per cent against the euro.

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