ATHENS: Greece and the entire eurozone are in limbo as the country gets set for a referendum on bailout conditions on Sunday.
Greece was officially declared in default on Friday by the European Financial Stability Facility, which holds €144.6 billion ($160 billion) of Greek loans.
Athens has just missed an IMF loan payment deadline, the first time that has happened to an industrialised country. If it defaults on a July 20 payment to the ECB, Greece might have to withdraw from the 19-nation eurozone.
On June 27, Prime Minister Alexis Tsipras had called a referendum on whether or not to accept the terms of the latest round of bailout aid.
The IMF estimated that Greece needs €50 billion over the next three years, including €36 billion more from EU lenders, and debt relief to stabilise its finances.
Tsipras called for a 30% cut of the Greek debt and a 20-year grace period for the rest. The total Greek debt is €323 billion, or nearly 180% of its gross domestic product (GDP).
European Commission chief Jean-Claude Juncker has said that Greece’s negotiating position with creditors would be dramatically weakened in the event of a ‘No’ vote in the referendum.
Published in The Express Tribune, July 5th, 2015.
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