Global markets were diving Monday morning after Greece closed its banks and appeared increasingly likely to miss a critical debt payment on Tuesday, potentially setting off a default that could lead to the country's exit from the euro zone. Yet while economists say the Greek crisis would certainly be a roadblock for the U.S. economic recovery and a setback for the global economy, it may not be a disaster unless it sparks a broader panic.
By ANDREW HIGGINS and ALISON SMALE, New York Times
BRUSSELS — Seeking to calm a whirlwind of uncertainty that has battered global markets, opened deep fissures in European unity and threatened to push Greece out of the eurozone, European leaders insisted on Monday that a deal was still possible to settle Greece’s spiraling debt crisis. But they gave no indication that this could happen before Athens runs out of cash to pay loans due on Tuesday.
By The Economist
ODYSSEUS was forced to choose between two routes for his ship: one that passed close to a sea monster (Scylla) and another that skirted a whirlpool (Charybdis). For a while, Greeks have in effect faced a similar choice, between austerity (as a condition for assistance from its creditors) and leaving the euro. Asking them explicitly to make this choice in a referendum might seem fair enough.
By Paul Krugman
Until now, every warning about an imminent breakup of the euro has proved wrong. Governments, whatever they said during the election, give in to the demands of the troika; meanwhile, the ECB steps in to calm the markets. This process has held the currency together, but it has also perpetuated deeply destructive austerity — don’t let a few quarters of modest growth in some debtors obscure the immense cost of five years of mass unemployment.