Today At Midnight – Will Greece default?

Greece is just hours away from defaulting on a loan from the International Monetary Fund, setting the stage for a tense showdown with its international creditors ahead of an effective national referendum on its membership of the euro currency.

Athens has until midnight to repay the $1.8 billion it owes as part of a $270 billion aid package it received from the IMF, European Central Bank and European Commission — 19 eurozone governments — during the financial crisis. Next month Greece is also due to pay the ECB $3.9 billion.

But as talks between Greece and its creditors have broken down as Athens has tried to negotiate less onerous repayment terms tied to austerity measures, global markets have tumbled over fears that the country's attempts to strike a better deal could see it forced out of the eurozone. Its membership of the European Union is also at stake.

Although markets across Asia bounced back Tuesday, European indexes remained deep in negative territory. And on Monday, steep sell-offs in these regions helped push the Dow down 350 points — its biggest one-day-point loss since June 20, 2013.

A Greek eurozone exit, if it comes, it is feared, may reignite the financial contagion experienced during the sovereign debt crisis when billions of dollars were wiped off the value of European government debt and other assets.

Still, while many analysts and officials have warned that Greece leaving the eurozone could have far-reaching consequences for economies and markets across the world, the specific impact of that possible development remains mostly unclear.

Mark Zandi, chief economist at Moody's Analytics, a unit of the ratings firm, said that "If Greece leaves the eurozone, there is unlikely to be a big bang moment when the country adopts the drachma.

"It will happen over time, as the Greek government issues IOUs that effectively become the new currency," he said.






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