The situation with Greece and the EU is moving so fast that, by the time you read this, its contents may be out of date!
There is no doubt that Greece should not be in the single currency. At the time of joining, the criteria for doing so were not met: the figures were blurred and bent to enable them to join, which is the root of the present problem. If politicians were prepared to bend the rules then, what are they prepared to do now?
Greece will be the first developed country to default on an IMF loan. What does this mean? It means that Greece will no longer have access to the international money markets and will lose its liquidity. It will be able to borrow only from the Troika, IMF or ECB – the very organisations it is currently in default to. The man in the street will find that Greece has become a cash economy, where no one trusts the banks. This is the beginning of the end, because no modern country can survive without a banking sector that works.
On Sunday 5th July we saw a referendum where the Greek people decided not to accept austerity and stay in the Euro. The referendum was driven by the political left who believe that you can continue without paying your way. The left-wing government does not want to live within its means and, for some reason, thinks this is totally fair!
But the government is weak; deferring the decision via a referendum to the population is also weak. And so it was the people who decided. Did they have the knowledge required to make such a decision, or did their hearts rule their heads?
We can only sit tight, watch what is happening and react in the right way when the time comes.