Greece has been in financial trouble for some time, however this week has brought the country very close to collapse. ATMs and banks are shutting down as agreement between the government and its creditors weakens.
The Prime Minister, Alexis Tsipras, has called for a referendum on the 5th July to let the public vote for or against the creditors’ proposals. These proposals aim to ensure the country can meet its debt obligations in a reasonable time frame, whilst improving future financial strategies and working towards a recovery. There will likely be huge cuts in government spending and national welfare to aid this.
It’s feared the country will leave the eurozone if voters decide against these plans. In a national TV broadcast, Tsipras indicated he would resign if the proposals were approved and wishes to see the creditors’ demands rejected. While he implied he didn’t want Greece to leave the eurozone, he believed the country would have a better negotiating position if the vote was ‘against austerity’.
The deadline to bailout the country is today as is the deadline to pay back £1.6 billion to the International Monetary Fund.
There is still time for creditors and the government to reach a deal, however with recent failed attempts, it’s looking unlikely. The referendum is set to be the deciding factor on Greece’s future.