The latest financial data from the Greek Government is a little confusing.
We know that Greece will default on its debt on August 20th.
But why would that happen?
That’s because Greece is not officially in default.
And this is not a Greek debt default.
Greece has a $1.5 trillion debt owed to the IMF, the European Union, the International Monetary Fund and the European Central Bank, which is about half the total amount owed to European and foreign creditors.
Greece is technically in default, but the country’s constitution prohibits it from defaulting on its debts.
Greek authorities have made clear that Greece is in no way bound by the EU or IMF terms.
But we’re going to see what happens when Greece goes into default.
The date of Greece’s default will be on September 20th, according to a government statement on its website.
So we are going to have to wait for the Greek government to actually declare that it is in default before we can have any sort of official reckoning of when Greece is going to go into default, says Jonathan Rauch, the director of the University of Pennsylvania’s Center for Economic and Policy Research.
This is why you are going see this sort of vague talk about when the Greeks are going into default and how that will affect the markets, Rauchan says.
“It’s not really clear how that default would affect the market, but it is not really a good way to gauge the likelihood of a default.”
Here’s a look at what we know so far about Greece’s upcoming default.
August 19, 2020: Greece officially enters default on September 18th.
That’s a day after Greece’s national elections.
This could be a symbolic moment, Raxman says, in which the Greek people declare that Greece’s debt obligations are unsustainable and the country has to pay them back.
But it could also be a time when the Greek economy drags down, he adds.
And it could be that Greece could be forced to default on the IMF’s loans because the country cannot borrow money to cover its debt.
“The default would be a political disaster,” Raxmans says.
That would be because Greece would be in breach of its international commitments.
The European Union and IMF are the two main creditors of Greece.
Greece also has $1 trillion in foreign debt.
It owes the EU $300 billion and the IMF $200 billion.
“This would not be a very good time to have a default on Greece’s international obligations, but we know that the IMF and the EU are very much aware of that,” Rauchen says.
September 20, 2020 – The Greek government formally declares its intention to go to default.
That means that Greece officially defaults on its foreign debt obligations, which means it’s going to default in the short term on its loans to the EU and the international creditors.
The Greek default could have a very immediate impact on the markets.
The euro fell sharply after the announcement, but by mid-afternoon it was back above $1,200, Rausman says.
The dollar rose, too, and that’s because people are holding onto their savings and bonds in anticipation of Greece defaulting, Rauxmans says, adding that this would make the Greek crisis worse.
October 6, 2020 : The Greek Finance Ministry officially declares its intent to default, as well.
That is a day before the first of three elections that will decide the countrys future.
This would also be the last day for Greece to declare its intention of going into a default, which would make it harder for the country to raise taxes and cut spending.
October 20, 2018 : The last day to declare an intention to default is October 20th in Greece.
And that’s when the country would go into its first “hard-currency” phase.
This means that the country could begin withdrawing cash from the Eurozone and then begin to reduce the amount of cash it holds.
Rauchnans opinion: There’s not much to say about Greece this month, but if it goes into the “hard currency” phase, Rauls says, the Greek default will look much worse.
That will be a much bigger blow to the economy than what happened with the Greek debt defaults, he says.
So the next time you hear someone talk about Greece default, remember that it’s the last time to talk about a Greek default, Rana adds.
October 21, 2018: The Greek Parliament officially declares that Greece intends to go “to hard-currency”.
This is a week before the election that will determine the country s future.
That could also make it easier for the government to avoid defaulting and to raise money for the economy.
October 22, 2018 – The next day to go through “hard” currency is October 22nd in Greece, when the government is expected to announce that it intends to start the phase of withdrawal of cash from Eurozone.
The “hard money” phase is meant to reduce and eventually eliminate the cash that the government holds in its account.
But because it