Thursday, 16 July 2015

Greece vote

today - Thursday 16th July 2015

The Greek parliament has voted yes to the deal on Greece's worsening debt crisis, but after the announcement by the IMF it now appears that even this deal cannot work. Meanwhile, across Greece, banks are closed and capital controls are in place, forcing citizens who have struggled through years of economic strife to deal with even tougher times.

In lieu of banks operating, Greeks must get their cash through ATMs, but the new capital controls limit withdrawals to 60 euros. The restrictions have led to long lines and some machines running out of funds entirely.

The forced reliance on ATMs causes obvious problems for Greeks who don't own debit cards, many of whom are elderly. Banks temporarily reopened last Wednesday to give those pensioners who lacked cards a 120-euro disbursement for the week, resulting in scenes of desperate seniors crowding into branches to get their funds.

In addition to the daily ATM limits, Greeks are also unable to electronically transfer any money out of the country without government approval. Those who need to send money abroad for emergencies like medical issues may find reprieve, though they face a review process. The measure is intended to prevent a massive flight of capital, but many of the side effects are severe.

The stoppage of transfers has huge implications for businesses that rely on foreign suppliers for their products. Greece imports over half its food and raw materials, but local companies now lack the ability to transfer money abroad to purchase those imports.

In addition to foodstuffs and associated materials, Greece also relies on imports to obtain medical supplies. Pharmacies have reported shortages of drugs, and hospitals are said to be in similar straits. Drug companies have promised to continue to supply Greece, despite being owed more than a billion euros by the government, allegedly.

While increased demand for necessities has caused runs on food and medicine, people seem to have given up on buying nonessential goods. This means many stores have struggled as business slows to a halt, causing further economic woes.

The controls have hit Greeks outside the country as well as those within it. Travellers have had their credit and debit cards declined while abroad because of money transfer restrictions, finding themselves cut off from cash.

Tourists visiting Greece have also faced problems. Although the daily limits don't apply to foreign nationals, closed banks and cash-strapped ATMs still pose obstacles. Greece's tourism industry is a vital part of its economy as well as a huge source of jobs, and any potential damage to the sector would be disastrous.

The debt is so large there is little possibility of paying it back, surely it would be irresponsible to lend them more money?

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