Despite a last-minute appeal to its creditors for a two-year package of financial aid, Greece at midnight on Tuesday became the “the first developed economy to default on a loan with the International Monetary Fund,” Reuters reports.
The other nations currently in IMF default are Somalia, Sudan and Zimbabwe. Greece on Tuesday set a record for the size of a missed payment ($1.7billion).
What happens now? And what are the prospects for the Eurozone and for Greece itself?
Kathy Gilsinan writes at The Atlantic’s live-blog that
In the “slow exit” option, Greece’s creditors don’t demand their deposits back immediately, but if Greece fails to secure outside sources of financing as public bills such as pensions and state salaries come due, “Greece could substitute ‘IOU’s’ for euros in some of its payments,” per CNBC. In the short term, these would in effect become a parallel currency. As the Wall Street Journal explained, “Over time, euros would disappear from circulation because people would hoard them as a store of value—and people would spend the government IOUs. De facto, the drachma, whether or not it would so be called, would become the main means of exchange.”
But there’s also the “no exit” option, where the country just keeps the euro. Polls have indicated that this is what Greeks want to do, and it’s what Prime Minister Alex Tsipras promised to do. If, say, he manages to secure a post-default bailout deal in negotiations set for tomorrow—allowing it to pay its debts to the IMF a few hours, or a few days late—Greece stays in the Eurozone that much longer. But the course of negotiations so far doesn’t give much reason for hope.
Ahead of Sunday’s referendum, a Royal Bank of Scotland infographic runs through the options for the immediate future.
But, predictably, there are always those predicting jam tomorrow…
Meanwhile, an IndieGoGo fundraiser for the country went offline after being swamped with curious visitors. Gizmodo reports that before crashing it had raised “a shocking €407,715.”
* WORLD * The US and Cuba have agreed a deal to reopen embassies and re-establish diplomatic relations. Details of the move are set to be announced on Wednesday morning. Both President Obama and Secretary of State John Kerry are expected to make statements. The Washington Post reports:
The White House must notify Congress 15 days before opening the embassy. After relations were severed in 1961, U.S. officials mothballed the six-story modernist embassy. U.S. officials returned to Havana in 1977 when the two countries opened “Interests Sections” under the auspices of the Swiss government. The American compound currently has about 50 U.S. staffers…
Even after the embassy is reopened, it would take congressional action to end the decades-long economic embargo of the island nation. Republicans controlling Congress have vowed to keep the embargo in place.
As the Twitter hashtag #WhoIsBurningBlackChurches gained traction, there were reports of a fire on Tuesday evening at a church in Greeleyville, South Carolina, the seventh at a black church in the south since the Charleston shooting.
The New York Times, meanwhile, reported that
Investigators have concluded that while the fire in Charlotte, and one two days earlier in Knoxville, Tenn., were certainly arson, they were probably acts of vandalism. Of the four structures at Briar Creek Baptist, only a youth activities building in the back of the complex burned, while the sanctuary was untouched.
* POLITICS * The State Department said on Tuesday night that a 9pm ET release of 3,000 pages of former Secretary of State Hillary Clinton’s emails is “not an effort to minimize media coverage of the documents but the result of the complexity of preparing the records for public release,” according to Josh Gerstein at Politico.
* Follow live updates from The Guardian here:
But mostly so far the only revelation seems to be that she can’t work a fax machine.
* BUSINESS * Apple Music launched, with a three-month free trial. Here’s ten things you need to know, via EW before downloading the app.
In slightly less good news for the tech giant, a US court ruled that Apple had conspired with publishers to fix the prices of electronic books.
Nike co-founder Phil Knight said on Tuesday that he would step away from the sportswear company and that he had recommended chief executive Mark Parker replace him as chairman next year.
* MEDIA * More tough times ahead for the Beeb, it seems..
(Tomorrow’s Papers Today/The Guardian)
* CULTURE * Misty Copeland became the first black principal dancer in the 75-year history of the American Ballet Theater. At a news conference, she said
“From the day that I met my manager, Gilda Squire, she asked me, ‘What do you want to do?’ ” she recalled. “And I said, besides continue dancing at A.B.T., I want to bring more people to ballet, I want to see more people that look like me on the stage, in the school, and in the audience — on the board. It’s just been one of my goals, and it’s been exciting to see some change happen.”
* SPORTS * The US Womens’ National Team will play in the World Cup final on Sunday after beating Germany 2-0.
The US will play either England or Japan, who meet in the other semi-final on Wednesday night.
Whoever Sunday’s teams are, Sepp Blatter won’t be there. So there’s that.