The EU creditors are also preparing for this as a possibility. A German newspaper claims that Eurozone leaders are drawing up plans for capital controls on Greece if there is no deal by this next weekend. Greece will be handed an ultimatum deal this week the paper claims.
Prime Minister Alexis Tsipras condemned the unrealistic demands of creditors especially demands for pension cuts when pensions have already been significantly reduced. At the same time he said that he was open to resuming talks at any time. The Troika has been insisting for days that time is running out and that Greece needs to decide if it is going to accept the demands of creditors. The time for negotiation is over some have said. Yet Greek negotiators appear to think that they can gain more concessions from the Troika or institutions since the IMF and the European Central Bank have a lot to lose if Greece defaults.
The increasing uncertainty over any solution to the Greek crisis was reflected even in US markets with the Dow Jones index continuing to fall but the declines were even steeper in European markets.
Tuesday - Markets suffer as Greece teeters on the edge of Grexit - live
In order to make earlier loan payments to the IMF, the Greek government had to borrow from pension funds and defer payments to schools and hospitals: The result is that the government has managed to scrape together just enough funds to meet IMF and ECB repayments in the last few months, while hospitals have no medicines and equipment, schools have no books and materials, and doctors and teachers leave the country. The situation for businesses is dire.
According to the Greek retailers' association each day about 59 business close down and 613 jobs are lost. Talks a week ago between head of the European Commission, Jean-Claude Juncker did not produce a breakthrough. Greece strenuously rejected creditors' proposed deal. Greece submitted a new list of reform proposals on Tuesday an extension of the program beyond its end of June deadline has also been discussed.
The new Greek proposals were already dismissed as inadequate by the EU by early Wednesday.
The chief European Commission spokesperson, Margaritas Schinas, said of the situation: “For this final push, the Commission is of the view that the ball is clearly on the court of the Greek government. It needs to follow up on the agreement on the meeting with President Juncker last Wednesday night.”
Those talks failed!
Pierre Moscovici, the EU Commissioner for Economic and Financial Affairs told a Greek delegation yesterday that "their latest suggestions do not reflect that state of the discussions between" between Brussels and Athens. Moscovici did say that work was continuing to break the deadlock on economic reforms that creditor's insist that Greece must agree to before unlocking the remainder of the funds in the bailout loan.
The Greek government finds it in an impossible situation as it attempts to be allowed at least a few of its anti-austerity policies as part of the deal in order to placate critics within its own party and retain some credibility with the Greek populace. So far creditors have given the government virtually nothing. The only option now for the Greek government seems to be to cave and spin the result positively or finally decide to default and perhaps leave the Eurozone.
Greece says it will not ask for a further bailout but without a new bailout it will not have the funds for payments this summer. The Greek debt crisis is far from over.
The Eurogroup has given the Greek government until April 20th to present to them a final list of reforms. A meeting of the group is scheduled for April 24.
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Ken is a retired philosophy professor living in the boondocks of Manitoba, Canada, with his Filipina wife. He enjoys reading the news and writing articles. Politically Ken is on the far left of the political spectrum on many issues.