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[h=4]Greece faces midnight default deadline[/h]Greece was just hours away Tuesday from defaulting on a loan from the International Monetary Fund, setting the stage for a tense showdown with its international creditors ahead of an effective national referendum on its membership of the euro currency bloc.
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Matt Krantz talks about the ongoing debt crisis in Greece and whether you should be worried. USA TODAY
Protesters hold a giant a Greek flag during a rally in Athens on June 29, 2015.(Photo: EPA)
Greece was just hours away Tuesday from defaulting on a loan from the International Monetary Fund, setting the stage for a tense showdown with its international creditors ahead of an effective national referendum on its membership of the euro currency.
Athens has until midnight (6 p.m. ET) to repay the $1.8 billion it owes as part of a $270 billion aid package it received from the IMF, European Central Bank and European Commission — 19 eurozone governments — during the financial crisis. Next month Greece is also due to pay the ECB $3.9 billion.
Greece has already indicated that it will not be able to make the payment, confirmed Tuesday by Greek Finance Minister Yanis Varoufakis.
And as talks between Greece and its creditors have broken down as Athens has tried to negotiate less onerous repayment terms tied to austerity measures, global markets have tumbled over fears that the country's attempts to strike a better deal could see it forced out of the eurozone. Its membership of the European Union is also at stake.
USA TODAY
Delamaide: Greek fallout political, not financial
Although markets across Asia bounced back Tuesday, European indexes remained in negative territory. And on Monday, steep sell-offs in these regions helped push the Dow down 350 points — its biggest one-day-point loss since June 20, 2013.
Wall Street stock futures were nevertheless eking out gains ahead of the U.S. market open in New York, possibly buoyed by reports that a last-minute deal may, against the dominant crisis narrative of the last 48 hours, slowly be coming together.
Greece's Ekathimerini newspaper reported Tuesday, citing unnamed government sources, that Athens is reconsidering a previous proposal by European Commission President Jean-Claude Juncker. No details were provided.
A Greek eurozone exit, if it comes, it is feared, may reignite the financial contagion experienced during the sovereign debt crisis when billions of dollars were wiped off the value of European government debt and other assets.
Still, while many analysts and officials have warned that Greece leaving the eurozone could have far-reaching consequences for economies and markets across the world, the specific impact of that possible development remains mostly unclear.
"If Greece leaves the eurozone, there is unlikely to be a big bang moment when the country adopts the drachma (the currency it used prior to adopting the euro in 2001)," said Mark Zandi, chief economist at Moody's Analytics, a unit of the ratings firm.
"It will happen over time, as the Greek government issues IOUs that effectively become the new currency," he said.
USA TODAY
Contagion from Greek exit likely to be limited
On Monday, Greek Prime Minister Alexis Tsipras hinted he may resign if his nation votes "No" in the referendum on Sunday. Tsipras' leftist Syriza party insists the vote is being called to strengthen its negotiating mandate with its creditors.
"If the Greek people want to proceed with austerity plans in perpetuity, which will leave us unable to lift our head, we will respect it, but we will not be the ones to carry it out," he said on Greek television late Monday.
European leaders including Italian Prime Minister Metteo Renzi and French President Francois Hollande dispute that. They say that Sunday's vote will effectively be a referendum on whether Greece wants to remain part of the eurozone.
Greek banks are closed as the government limited cash withdrawals to about $68 per day in a bid to stave off bank runs and keep its financial system from collapsing.
Meanwhile, protesters from both the "Yes" and "No" camps have held rallies in Athens.
USA TODAY
5 monetary union breakups
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