The next few days are where the pedal hits the metal.
From Reuters:
Greece imposes capital controls as crisis deepens
Greece moved to check the growing strains on its crippled financial system on Sunday, closing its banks and imposing capital controls that brought the prospect of being forced out of the euro into plain sight.
After bailout talks between the leftwing government and foreign lenders broke down at the weekend, the European Central Bank froze vital funding support to Greece's banks, leaving Athens with little choice but to shut down the system to keep the banks from collapsing.
Banks are expected to be closed all next week, and there will be a daily 60 euro limit on cash withdrawals from cash machines, which will reopen on Tuesday. Capital controls are likely to last for many months at least.
A bit more:
After months of wrangling, Greece's exasperated European partners have put the blame for the crisis squarely on Tsipras' shoulders. The 40-year-old premier caught them by surprise in the early hours of Saturday by rejecting the demands of lenders and calling a bailout referendum.
The creditors wanted Greece to cut pensions and raise taxes in ways that Tsipras has long argued would deepen one of the worst economic crises of modern times in a country where a quarter of the workforce is already unemployed.
After announcing the referendum, Tsipras asked for an extension of Greece's existing bailout until after the July 5th vote. Euro zone officials refused, and in his televised address Tsipras bemoaned the refusal as an "unprecedented act".
They are both wrong - raising taxes is a 100% guaranteed way to get capital to flee the nation. Lower taxes and make the tax structure fair and simple and your revenues will increase.
As for the pensions - these promises are seriously underfunded.. The Greek Government and Labor Unions have too many people working for them. They cannot afford these people and their jobs need to be cut. Not a popular move but real solutions are never popular at first.
This is not without precedent - Iceland's economy crashed in 2008 (too high national debt, banks playing with stupid investments and too large government - sound familiar?) and they spent several years in a deep recession with inflation rates up to 14%. They tightened the belt, lowered taxes and are now roaring back to life. This can be done folks - it is not rocket science...
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