Likely to be the largest default of all time, with an explosion of the euro would lead Europe into a “terra incognita.” But the Greek crisis began long ago. Here are five facts to know to understand the scope of the referendum on Sunday that could decide the negotiation fails, or report the negotiators on the negotiating table with an attitude of greater availability.
– THE ACTORS . The greek government, an unprecedented alliance right-left with the idea of giving the common war on the existing European structures, faces a ‘coalition of the creditors’ varied and sometimes disagree. There is the troika, then renamed the behest of Athens ‘institutions’, which brings together EU Commission, ECB and IMF, the latter increasingly intolerant of their participation and explicitly in favor of a cut debt, unsustainable since the worsening of the accounts Athens. There are EU partners Eurozone: a relationship is always difficult, but undermined by the steep fall of confidence in the clash in recent months. Angela Merkel, dominus in the deal, isolated politically Tsipras and obtained that the most vocal enemies of austerity is stringessero around Berlin.
– The BACKGROUND. The Greek vote last offer, the ultimate, the creditors, who pushed Athens to leave the negotiating table, the EU to close the deal, with the non-payment of 1.6 billion to the IMF as a first concrete result. In fact, they come home to roost many nodes accumulated in the months and years. That of Greece, a country over-indebted, always unruly demands of creditors, but also evidenced by a collapse of 25% of GDP, an austerity program that brought the debt close to 180%, deflation still galloping. And creditors fed up with having to deal with a nagging situation when other countries in saving – Ireland, Portugal, Spain – all in all got away.
– THE OBJECT OF THE DISPUTE. Privatization, cuts in pensions, labor reform. But at the center of the clash it is likely the debt: that Tsipras would, as promised to his constituents, were cut (again, after the operation of 2012). For creditors, notably Germany, at most there is dancing in a new rate cuts and extension of maturities, but not the amount. Tsipras, won the vote by a large majority in January, has been the trigger for the clash.
– TIMES. The referendum wanted to Tsipras has accelerated events, drawing upon itself, in the narratives of the two negotiating parties, almost the meaning of a ‘income rationem’, a decisive moment: yes euro, no euro. It may not be so. The negotiations could well continue, on the basis of what will be the vote. Certainly we know that Greece faces its key deadlines in the little more. July 20 has 3.5 billion to the ECB, other 3.2 billion expire in August. A default towards Frankfurt – inevitable without an agreement, unless solutions of financial engineering last moment – could severely damage the liquidity to banks and precipitate events. In any case, the creditors know very well that with the closed banks is getting closer the moment when the government can not pay salaries and pensions, except to resort to ‘pay’ or as a parallel currency. Will not last long.
– RISK. Greece default is played this time a real, not a default ‘controlled’ as in the past. And then, with a certain probability, also belonging to the euro, since no external support is not clear with which money could run its economy and support its banks. Several economists argue that in the long run would be good for its economy, although it is unclear what would improve in part to a boost (slightly) export greek with a devaluation of at least 30%. Certainly, there is a harsh recession, already in place, already in the best scenario, to a resumption of negotiations, is estimated at two years. But Greece is not the only risk. Europe has adopted wide instruments to contain the contagion spreads is visible from all in all content of Italy or Spain. This does not mean that Europe is able to afford the ‘Grexit’. Why it would mark a precedent for some tragic: that the euro is reversible. That countries under pressure, both for internal errors that the bubbles created by the macroeconomic imbalances between creditor and debtor countries within it, they can get out. Everyone would look at who’s next on the list after Greece and the look goes to countries with high debt.
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