Greece’s Banks Give Eurozone Peers Glimpse Into Abyss

Greek banks do not have enough money to provide depositors with limited amounts, restricted at $67 per day, which may be needed for daily expenses. Greece is not alone. “Beyond Greece, the rest of the eurozone must look to an acceleration of full banking union to protect weaker banks in Portugal, Austria and other countries,” writes Paul Davies for the Wall Street Journal. The bailout program for Greece ends with June and European Central Bank demands for repayment of emergency funding would break banks and cause cross-border panic. Greece has scheduled a referendum for its citizens to decide on a deal with creditors – but the issues are complex and even economists do not know the full consequences of default or the nation’s exit from the eurozone. “Beyond Greece, the rest of the eurozone must look to an acceleration of full banking union to protect weaker banks in Portugal, Austria and other countries,” Davies concludes, urging common banking measures for the union. "Common deposit insurance, resolution authority and capital rules are critical to stopping the spread of financial instability.” European leaders insist a deal is still possible. – YaleGlobal