The Greek government revealed it does not have the funds to pay what is owed to the International Monetary Fund (IMF) and cannot meet its obligations on 30 June. As a result, procedures for the country’s transition to a state of default could be initiated automatically.
The news from Greece and the IMF slashed some 300 points from the US stock exchange and drove oil prices lower.
In Greece, banks locked their doors and ATM machines were shut down as the country’s default was formalized.
According to Greek newspapers, the European Central Bank can act without delay by treating the Greek weakness as a sign of default and carrying out a major haircut of the value of guarantees offered by Greek banks for refinancing purposes.
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