Greece referendum sounding like a ultimatum

Exactly at the point in time when Europeans were eventually acknowledging that an agreement was within reach, the decision by Prime Minister Alexis Tspiras to organize a referendum on 5th of July was a surprise and dramatically increased the risks. Due to this decision, Europeans and the IMF have considered since then that negotiations were broken, notes BNP PARIBAS.

The ECB had to freeze the maximum amount available for refinancing the Greek banks on ELA and, capital controls were imposed on 29th June. From July 1st, Greece has built payment arrears to the International Monetary Fund (IMF) and the second adjustment program from the European Fund for Financial Stability (EFSF) has ended, making its extension impossible and the remaining funds in this program (EUR 13.5bn) unavailable.With another U-Turn, the Greek government asked Europeans late on Tuesday evening to consider the opening of a financing program from the European Stability Mechanism (ESM) covering its financing gap for the next two years. The situation is very confused but, the referendum is expected to take place on Sunday, says BNP PARIBAS.