(Photo courtesy Wikipedia)

Greece (MNN) — Greece may have tried to posture its way out of trouble with the European Union, but when the chips were down, the EU called its bluff. Now what?

Greece failed to make its 1.5 billion euro payment to the International Monetary Fund (IMF) at the end of June, making it the first developed economy to go into default. That was merely a drop in the bucket compared to the 3.5 billion euro payment due in late July. But will economic calamity hit Europe should Greece withdraw?

Tasos Ioannidis with AMG International says there’s some confusion on the part of the Greeks as to what they were agreeing to and voting on. “The Europeans said that it was a vote on whether the Greeks wanted to stay in the Eurozone or not. The Greek people chose to interpret it as the government was telling them this was a vote on whether they wanted to accept the (IMF) terms or not.”

Ioannidis wonders, “If the point was to accept the last offer made to them, what was the point of the referendum?” The NO vote seemed to be a flat rejection of the bailout terms and approval for leaving the Eurozone. However, “At the same time, the people were asked in exit polls whether they want to stay in the Eurozone or not. More than 75% say they want to stay in the Eurozone regardless of what agreement there is, yet at the same time, they say they don’t like the agreement that was offered to them.”

Ioannidis goes on to explain, “For the Greeks, it was either a choice of believing their leader or believing the Europeans. And they chose to believe their leader.”

The country has been in recession for five years. Its economy has shrunk by 25%. Unemployment is at 27.6%, with the unemployment rates for youth at 49.7%. In advance of Sunday’s referendum and a looming default, throughout Greece banks closed in order to quell an expected run. The financial hardships people have suffered since 2009 have been blamed on austerity measures included with the bailout loans that kept the country solvent.

Now that Greece is in default, the IMF aid package has been withdrawn. Despite last-ditch efforts being made to salvage the situation, “The terms that Greece has to accept at this point are much harsher”‘ says Ioannidis. He adds, “It is unknown what is going to happen, although the chances of a Greek exit from the Euro are much, much higher right now than they have ever been.”

There’s talk that either Russia or China could be waiting in the wings with a bailout. Russia would gain an enormous foothold in Europe if it was able to place bases or troops in Greece. However, Greece’s second bluff appears to have been called. “Russia has indicated very clearly for the Greeks not to expect anything from them. China has not said anything. The value of Greece for China is as part of the Eurozone.” In fact, Ioannidis says, “The Chinese and the Russians, yesterday and today, say it’s very important that Greece comes to terms with its creditors.”

Greece’s finance minister resigned, signaling a possible cabinet shake-up.   Watchdogs think it’s the first step toward putting a more centrist negotiating team in place to deal with creditors.  On Monday, Greece’s top negotiator in aid talks with creditors, Euclid Tsakalotos, was selected to replace Yanis Varoufakis, the former finance minister.

That begs the obvious question: what proposal could any new Greek team bring to the table other than what is already offered? “They are hoping that any agreement will have less in taxes; yet at the same time, the government does not want to reduce the public sector. You can’t have it both ways. There is no way. Something has to give.”

(Photo courtesy AMG International)

Shortly after we spoke with Ioannidis, he sent a message regarding the outcome of Monday’s meetings with the Greek cabinet. German Chancellor Angela Merkel and French president Francois Hollande wanted Greek party leaders to sign a common statement affirming the desire to stay in the Eurozone and that they will support terms of the bailout agreement.

According to Ioannidis, four of the six parties signed the terms. Those who refused to sign included Golden Dawn (neo Nazi party) and the Communist Party of Greece.

With all the machinations of the last 72 hours, it seems like something is happening, but in uncharted territory, it’s hard to know exactly what the outcome will be. “The Greek banks are not going to be open for a while longer. When there is no agreement, it is extremely unlikely that the banks will be able to open. From news reports, the big banks, even those with capital controls, only have liquidity until the end of the week,” says Ioannidis. The longer the banks stay closed, the more magnified the problems become on the ground for the average citizen.

For ministries, the issue becomes crucial. (See Story 2 for a continuation of impact on ministries)

The alternative could be catastrophic.

Greece is one of 19 countries that share the euro. It means that goods and services can go across borders without changing currency. If Greece can’t renegotiate its debt, it could be forced out of the Eurozone.

A default would mean at least couple of firsts: (1) it’s the largest single overdue payment in IMF history, ( 2) as well as the first advanced economy to default in IMF’s 70-year history. As far as defaults go, Greece would join Afghanistan, Haiti, and Zimbabwe in that distinction, although Afghanistan and Haiti were both dealing with major insurgencies at the time.

In an effort to prevent impending default, Greece also requested a short-term extension of the current bailout program. However, any bailout would be attached to stiff reforms from creditors. At the same time, the country is set to vote Sunday on proposals from the country’s creditors.

(Photo courtesy AMG International/Greece)

How this is fiscal showdown hitting the average citizen? Tasos Ioannidis with AMG International is in Greece this week. He says, “The immediate reaction to these developments was for the Greek people to be afraid of what’s happening when it became apparent that the negotiations would fail.” Hours before the banks closed, “there were long lines at ATMs around the country. A lot of them ran dry, and then everything closed down.” That sparked other fears, he says. “There was also widespread fear of basic necessities running out. Gas stations around the country ran out of gas. There was a run, also, on supermarkets, and a lot of shelves were empty.”

Pensioners were caught off-guard. Many could not withdraw their pensions from the banks for living expenses. Since they have the thinnest margin of survival, Greece will re-open 1,000 bank branches until the end of the week to cater to pensioners who do not use cash cards for automated teller machines. For everyone else, capital controls apply. “Next week, the banks will open, but still there will be a 60-Euro-per-day limit on what they can withdraw.”

Plus, the state treasury is running out of money. “Depending on how the IMF proceeds, it will basically make Greece formally bankrupt, and that will create further problems.” Since nobody knows what will actually happen, everything is in limbo. That’s problematic for missionaries who get their support from overseas. With the banks closed and no funds moving anywhere, “All the businesses will be affected, all the ministries. St. Luke’s [Hospital] will be affected because most transactions between businesses will have to go through special procedures [and] permissions from the Greek Central Bank.”

Ioannidis says some businesses put their employees on furlough. Others are closing their doors because “they cannot get supplies from abroad. Foreign suppliers are demanding payment up front. They will not give credit.” It’s adding to the snowball effect. Incredibly, he adds that “as people have gotten desperate, and as this crisis leaves them–they just don’t know what to do–when they are presented with the Gospel, there is a lot better response these days.”

As the crisis has unfolded, AMG’s ministry arms have felt the weight of need increase. Local churches have opened their doors as relief stations. “We pray that as we continue to help people at the point of their needs, with basic stuff like food, clothing (at St. Luke’s hospital, by providing medical care, as the government’s health system has continued to collapse), that we will continue to have the opportunity to share the Good News.”

The concerns in Greece affect the expatriates there, too. Ask God to give them strength and wisdom for the days ahead.

Because there’s support coming from AMG, it has helped keep the ministry moving. However, with such a murky future for Greece, “We want people to pray that many hearts will be touched, that God will take this disaster here and turn it into an opportunity to touch lives, to draw lives to Him, and that they will come to know Him as Savior.”

(Photo courtesy AMG International/Greece)

Greece (MNN) — Greece’s economic troubles are no secret. In 2009, the country sought an emergency bail-out to stay solvent.

Years of hard cost-cutting measures followed. And now, five years later, the Greek people have had enough. With unemployment at 25% (youth unemployment is closer to 60%), minimum wages falling, taxes rising, and pensions being squeezed, people don’t want to deal with austerity any more. They rebelled in last month’s elections.

The new prime minister, Alexis Tsipras, came to power promising an end to austerity, a raise in minimum wages, preserve pensions, and promising that their suffering would end quickly. Tasos Ioannidis with AMG International says, “He’s been just elected, and so people are supporting him and they’re feeling nationalistic pride; so even the church people are supporting him.”

His conundrum: in order for him to fulfill his campaign promises, the European Union has to provide additional funding for Greece–but they’re not willing to fund deficits for the country. “If he insists on what he wants to do, he’s going to basically run out of money. The European Union is going to refuse to lend him anymore. Greece will not have any liquidity.”

Ioannidis says the next few days are critical.
“There is a critical meeting that is taking place on Wednesday, the 11th of February, in which Greece is supposed to present a plan of what it is proposing. And then there is supposed to be an agreement on the future direction for Greece on the 16th of February.” However, with the way Tsipras remains defiant, “If there is no agreement, potentially Greece can run out of money by the 28th of February. And then nobody knows what will happen after that.”

Tsipras has also promised that he won’t endanger Greece’s presence in the Eurozone, but, notes Ioannidis, it’s hard to see how he’s going to keep all his promises and stay within the Euro. “People’s deposits in the bank will be frozen; the banks will not be able to give people whatever they have in their bank accounts. There’s going to be a devastating time for Greece, and the end result will be that Greece has to exit the Euro.” A Greek exit will leave the European Central Bank holding billions of dollars of Greek debt. That could, in turn, devalue the Euro, create global cash flow problems, and lead to investor troubles.

(Photo courtesy Wikipedia)

On another front, Tsipras is an atheist. Can he be trusted? “He’s also said in the past that he’s going to tax the property of the Church, so things may not be so rosy if he proceeds and makes good on those promises.”

With the future of Greece so uncertain, Ioannidis says prayer is appreciated. It has been what has upheld an exhausted staff. God is working because people are open to the Gospel now. “We see that throughout our ministries. We see that through our St. Luke’s Hospital in Thessaloniki, where we actually have record numbers of patients as the quality of government healthcare has gone down.”

Uncertainty keeps people on edge and nervous. As the world watches the next few days, Ioannidis asks, “Pray that God will intervene, that God will continue to draw people to Him, that the churches and the ministries would be supported. Also, as a ministry, we need financial support as we continue to provide for people that have financial needs.” Ultimately, “Regardless of what happens in the country, whatever the outcome is, [pray] that God will protect His people, that God will protect the ministries that are there and will continue to use them for His glory.”