Tag: Greek crisis

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Greek crisis deepens as loan repayment deadline passes

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Kim Hjelmgaard and Marco della Cava, USA TODAY8:18 p.m. EDT June 30, 2015

Greece’s midnight deadline passed Tuesday for repaying $1.8 billion to the International Monetary Fund and other international creditors, deepening a financial crisis that threatens the Mediterranean nation’s membership in the European Union.

Despite an eleventh-hour effort by Greek lawmakers Tuesday to secure a new two-year debt deal before the deadline, European finance ministers reviewing Greece’s proposal concluded their conference call without offering a bailout extension.

The ministers agreed to convene again Wednesday to further discuss the details of a new series of loans from the eurozone’s European Stability Mechanism, its $560 billion rescue fund.

After the deadline passed (at 6 pm ET), Greece joined Zimbabwe, Sudan and Somaliain being in arrears to the IMF. Fitch Ratings has downgraded Greece’s government debt further into junk territory.

https://www.usatoday.com/story/news/2015/06/30/greek-crisis-deepens-as-loan-repayment-deadline-nears/29518847/

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The next Greece may be in the U.S.

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Published: June 30, 2015 10:23 a.m. ET

When Chicago Public Schools announced on June 24 that it would borrow $1 billion to make a $600 million-plus pension payment due June 30 an eerie feeling spread across bond investors and taxpayers alike.

It was the same feeling that gripped investors when Moody’s Investors Service downgraded Chicago’s credit rating to junk based almost entirely on the city’s pension problems.

The fear was that elevated pension costs, in cities like Chicago, might push these public entities into insolvency, wiping out much of the holdings of municipal-bond investors.

Once a sleepy corner of the municipal bond market — often not even properly reflected on cities’ balance sheets — public pensions have recently turned into the biggest headache for taxpayers and municipal-bond investors, threatening to bring down the finances of U.S. cities and states.

In some places, like Puerto Rico, Illinois, New Jersey and Chicago, entire balance sheets of cities or states hang in the balance.

Detroit, as well as three Californian cities — Vallejo, Stockton and San Bernardino — had to declare bankruptcy because of their overwhelming pension costs.

In those cases, the courtroom turned into a brutal battlefield pitting bond investors trying to save the money they invested in those cities’ municipal bonds on one side. And on the other side have been public employees trying to save the dwindling pensions that were promised to them.

Recent cases have shown that bond investors are clearly losing this battle.

https://www.marketwatch.com/story/these-lurking-debts-may-turn-us-cities-states-into-greece-2015-06-30

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Greek crisis summit called after talks fail and bank fears grow – as it happened

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Greece is facing a full-blown banking crisis after a meeting of eurozone finance ministers broke down in acrimony and recrimination, forcing leaders to meet next week.

Greece is facing a full-blown banking crisis after a meeting of eurozone finance ministers broke down in acrimony and recrimination on Thursday evening, bringing the prospect of Greek exit from the eurozone a step nearer.

Some €2bn of deposits have been withdrawn from Greek banks so far this week – including a record €1bn yesterday – triggering fears that a breakdown in talks would spark a further flight of funds. The German leader Angela Merkel, French president François Hollande and Greek prime minister Alexis Tsipras agreed to stage an emergency EU summit on Monday as a last critical attempt to prevent Greece going bankrupt. A representative of the European Central Bank told the meeting it was unsure whether Greek banks would have the funds to be able to open on Monday.

Eurozone talks end without deal as Greek proposals rejectedRead more

As thousands of pro-EU protestors gathered outside the Athens parliament building, leaders of the eurozone and the International Monetary Fund aimed bitter criticism at the leftwing Greek government, accusing it of lying to its own people, misrepresenting and misleading other EU leaders, refusing to negotiate seriously, and taking Greece to the brink of catastrophe.

https://www.theguardian.com/business/live/2015/jun/18/greek-crisis-eurozone-finance-ministers-merkel-live