The Eurozone is starting to crack. The European Central Bank has stopped providing liquidity to Greek Banks.This occurred after there was a run on some Greek banks due to instability in that nation.
The news sent the euro lower against the dollar, fanning concerns among investors and in Greece that the country may have to leave the euro zone.
The development highlights the weak state of the banking sector in Greece, where Greeks are pulling euros out of the banks in fear that their country may exit the European single currency despite the declared determination of EU powers Germany and France to keep Athens in the monetary union.
“As recapitalization wasn’t in place, the ECB stopped monetary policy operations,” a euro zone central bank source told Reuters, declining to be identified. “They are now in the ELA of the Greek central bank.”
Stay turned, this is going to get ugly!
Germany and France hold a lot of Greek debt. The Greeks have shown themselves unwilling to be responsible, and the IMF is not assuming proper leadership. The institutions are structurally flawed and rampant debt has been encouraged for too long by everybody. You bet your booty that this will get messy.
The Greeks Don’t Want No Freaks:
I’d think they will meander through it somehow.