Greece and its creditors have failed once again to come to an agreement. Instead the euro partners Monday responded to the situation with yet another contingency plan to end the current financial deadlock.
Basically, the arrangement stipulates that creditors will give Athens another chance of coming up with its own plan and they are willing to wait until week’s end to see if the strapped country can meet the current emergency plan provisions and somehow avoid being removed from Eurozone membership.
The ministers meet Thursday and Friday in Luxembourg.
French President Francois Hollande warned against the possibility of the negotiations breaking down. "I have often said: caution, we now come in a period that can be turbulent, if no agreement is found," he said during a visit to the air show in Le Bourget near Paris.
Bailout Plan
The emergency plan hearkens back to the bailout program introduced in 2013 in Cyprus and includes a government control of the Greek-European payments on weekends. This would call for the banks to remain closed in Greece for a few days followed by a restriction on daily ATM withdrawals and electronic payments locally as well as abroad. These controls were designed to prevent a run on the bank with a massive outflow of bank notes. These measures have now been completely withdrawn.
Financial experts regard this move as hurting the U.S. as investors will move out of the euro and into U.S. Treasury bonds, creating turbulent market conditions, something the Fed does not want to happen.