Tag Archives: Greece

Top 5 Destinations for 2018

1. Yucatan, Mexico

The ongoing fascination with this part of the world looks set to continue well into 2015. This year, consider the Yucatán Peninsula in the South East of the country. Boasting breathtaking Maya ruins, some of the most heavenly stretches of beach you’ll ever see and vibrant culture by the bucket load, this is a great destination for those looking to camp out for a few weeks in a place that has it all. Don’t leave without exploring the rainbow-coloured coral reefs and visiting Merida market, for a taste bud-tingling insight into the phenomenal local cuisine.

Santorini, Greece

2. Santorini, Greece

Note – the above image of Santorini IS real. It’s actually that dreamy. The crescent-shaped island is the perfect location for a luxury holiday, with its blue-domed roofs, black-sand beaches and wondrous sunsets over a giant sea-filled Caldera. Visit Fira, the insanely picturesque cliff top town and book at least one night in Grace Santorini, for impeccable Cycladic interiors and a plunge pool looking out over the Aegean Sea. Heaven, in a nutshell.

Panama, Central America

3. Panama, Central America

Ever since we featured the Ace Hotel’s brilliant American Trade Hotel situated in the heart of the city, we have been increasingly fascinated by Panama. Razor-sharp gentrification aside, this tropical country is resplendent with natural wonders so adventure is inevitable. Explore the dizzying cloud forests of Chiriquí, soak up the Caribbean vibes on the Northern shores and surf gigantic Pacific swells in the South. This is the destination for intrepid adventurers.

Montenegro, Southeastern Europe

4. Montenegro, Southeastern Europe

While nearby Croatia has been buzzing for a few years now, our attention is firmly on Montenegro for 2015. A turbulent history has left a fascinating mish-mash culture fusing Roman, Catholic and Muslim influences. Nature lovers will rejoice over the gloriously unspoiled landscape; beautiful lakes, calm seas and the spectacular black mountains are bound to coax even the most unfit of visitors on a gentle hike. If you’re on a more generous budget, a stay at the Aman Sveti Stefan is a must. The entire island of Sveti Stefan, a former fishing village in the 14th Century, has been given over to this magical, peaceful hotel. A UNESCO heritage site in its entirety, every room, suite and cottage is to die for. Ultimately, if you’re craving leisurely exploration by day and slow summer evenings spent sipping local wine, Montenegro is the place.

Pilsen, Czech Republic

5. Pilsen, Czech Republic

Culture vultures should head to Pilsen, the capital of West Bohemia. Nominated as the official capital of culture for 2015, a yearlong schedule of over 600 concerts, exhibitions, artistic interventions and theatre productions is set to revive the city unlike ever before. A dizzying climb to the top of the 13th-century Gothic church, St Bartholomew, will provide a welcome break from the arts…as well as a few pints of the outstanding beer. Pilsen is infamous for developing the very first lager back in the mid-19th century. These days, the city is known for making some of the best beer in the world – apparently something to do with the water. Hardcore enthusiasts can take a tour of thePilsner Urquell Brewery to see where the magic happens. All in all, this city is fast emerging as a favourite for stag weekends and guy time.

RANKED: The world’s national debts, from safest to most risky

CDS map

Click here for maximum resolution

Bank of America’s Transforming World Atlas has loads of lovely infographics in it, but one of the most colourful is a map of the world’s riskiest sovereign debt.

The map uses the prices of credit default swaps, which are derivatives that pay out if a borrower defaults.

Sovereign credit default swaps have been used as a type of insurance against sovereign governments not paying back the money they owe. Like any insurance product, the more expensive it is the more likely the event you’re insuring against will happen soon.

Venezuelan debt is by far the most risky, costing twice as much as Greek or Ukrainian debt to insure.

The graphic also shows just how far Spain and Ireland have come. The market thinks their debt is pretty risk free, with lower CDS spreads than Italy or Portugal. The Spanish economy is going through a bit of a revival after suffering a devastating housing crash and unemployment crisis.

10 of the best European islands … that you’ve probably never heard of

Lyngør Islands, Norway

A far cry from Norway’s jagged western fjord-filled coastline, the Lyngør Islands offer Baltic calm rather than wild Atlantic. Base yourself on the islands of Sandøya or Borøya (where you can park your car) and use the ferries to get around. If ferries are too mainstream, Norwegians rave about kayaking between these tiny islands, so expect to see lots of brightly coloured boats being hefted around by visitors. Kayak rental is available in Tvedestrand, the town at the head of the fjord. Lyngør Island can only be reached by boat: there are no cars, and the main village consists of weathered clapboard wooden houses.

Stay The Tvedestrand 58 holiday house on the island of Boroya, which sleeps up to six, costs from ÂŁ455 for seven nights.

Getting there Norwegian airlines flies to Oslo from £40 return; it’s then a two-hour drive south.

Mljet, Croatia

Beach Stara Baska - island Krk, Croatia

Odysseus was allegedly held captive here, for seven years, by the nymph Calypso, but it can’t really have been all that bad. One of Croatia’s southernmost islands, it’s best known for exceptional local produce and wild beauty. There are great hiking opportunities around the two saltwater lakes in Mljet national park and it is possible to hire a sailing boat to reach the 12th-century Benedictine monastery on Melita Island. Scramble around the island’s shady trails and swim in some of the clearest water in the Adriatic at Blace Bay. Choose a bottle of local red for your sundowner – Dingac and Postup are produced on the island – and try the plates of raw mussels drizzled with lemon juice, a local speciality.

Stay There’s only one hotel and it’s right on the coast – the three-star Odisej Mljet, with doubles from £33 B&B.

Getting there It’s a 90-minute ferry from Dubrovnik to the bay of Sobra on Mljet on Jadrolinjia lines.

Aegina, Greece

The hillside village of Vagia on Aegina, Greece

Come for the seafood, stay for the peace. Aegina, only one hour by ferry from Athens, is a great base during a summer weekend break. The heat in the city can be harsh; escape the crowds to spend evenings snorkelling the coast and devouring cuttlefish in wine sauce at Nontas – a beachside taverna close enough to the water to see your dinner being caught by local fishermen. As for hiking, the island’s trails lead you past ruined churches, meadows of wildflowers, and craggy hillsides.

Stay Clean, bright, and sun-drenched rooms at the Marini Luxury Apartments come with balconies and panoramic views over the sea, doubles from £66.

Getting there Metro from Athens centre to Piraeus port, an hour’s hydrofoil journey (£7) to Aegina.

Fehmarn, Germany

Dike Path, Sulsdorfer Wiek with Sun, Summer, Orth, Baltic Island of Fehmarn, Germany

Fehmarn, an island just off Germany’s Baltic coastline, catches the rays in spades while adventure junkies can kitesurf the days away (it plays host to various kite surfing competitions every year). Those after a more gentle ramble should pack their boots for Fehmarn’s portion of the Via Scandinavia: a walking route from Lübeck that runs through Germany and Poland, and on to Norway. Fehmarn’s scenery makes it unique among Germany’s Baltic islands. Badwelt Fehmare is a spa complex on the island and many visitors make the journey to enjoy seaweed wraps (taken from the shore) and natural saltwater scrubs.

Stay Close to the old town and a sandy beach, Apartments mit Flair has accommodation from ÂŁ42 a night.

Getting there From Hamburg it’s a 90-minute drive to Burg, the historical capital of Fehmarn.

Inis OĂ­rr, Aran Islands, Ireland

Inisheer (Inis Oirr), Aran Islands, Ireland.

This is an island of ancient language and mythology where the white beaches stretch out into the Atlantic. The smallest island in the Aran archipelago, Inis Oírr (pronounced Inisheer) only got permanent electricity in 1997. The Inis Oírr trail threads through fields carpeted with wildflowers; gentian, cranesbill and ladies mantle dust your ankles as you pace around the island under the shadow of O’Brien’s ruined 14th-century castle. Recuperate at Ostan Inis Oírr with a pint of Guinness and live music, which gets visitors up for a dance.

Stay South Aran House, with doubles from £60 B&B, is a guesthouse with free Wi-Fi, four en suite rooms and underfloor heating. The attached cooking school suggests that guests are in for a treat at breakfast.

Getting there Ferry from Ros a’Mhil costs £19, adult return, with Aran Island Ferries.

Belle-Île en Mer, Brittany, France

The port of Le Palais on Belle-Île-en-Mer.

An island that lives up to its name, its dramatic coastline and green interior inspired 19th-century authors and artists, most famously Flaubert and Monet. Now it draws holidaymakers in their droves in August, but outside of this short peak season its 60 beaches are gloriously crowd-free; and even in August your fellow tourists are unlikely to be Brits, who prefer chichi Île de Ré further south over its wilder Atlantic cousin. While Belle-Île has a handful of low-key attractions, including Sarah Bernhardt’s house, now a museum, and the lighthouse at Bangor, the main draw is the natural environment. In August beach lovers and walkers are joined on the island by opera buffs who come for the popular classical music festival Lyrique en Mer. Read more on the island in our Brittany article.

Stay Hotel Le Clos Fleuri has doubles from £53.

Getting there Ferries leave from Qubieron, 14km away.

CĂ­es islands, Galicia, Spain

Rodas beach on Las Islas CĂ­es

Despite this paper naming Rodas beach on Las Islas Cíes one of the best beaches in the world, these islands remain an off-the-beaten-track gem, thanks to a strict limit of 2,200 tourists a day. Their nickname – the Maldives or Seychelles of Spain – gives a clear indication of what to expect: gorgeous white beaches, turquoise waters … in other words, your average untouched paradise. The three islands (Monteagudo, San Martiño and Faro) opposite the town of Vigo on the Galician coast form part of the Islas Atlánticas national park. This means its wildlife, including colonies of marine birds and rich marine life – which can be explored by scuba divers (with a permit) – is protected.

Stay The only accommodation is a campsite – Camping de las Islas Cíes – with 800 places on Faro, which opens in Easter week, and on subsequent weekends until June, and then regularly between June and September. From £5 adults, £4 kids; £50 to hire a double tent.

Getting there A ferry service from the harbours of Vigo, Cangas and Baiona starts in Easter week and runs weekends and then everyday between the beginning of June and the end of September.

Hiiumaa, Estonia

Tahkuna Lighthouse on Hiiumaa.

The smell of nature hangs heavy on Hiiumaa: from white sand beaches slightly damp after a rainfall, and seaweed sweetly fermenting at one end of the beach. The second largest island in Estonia, this is the place to come if you have a book to write or pictures to paint. There’s not much to do other than tramp along the coastal paths and admire centuries-old Baltic-style lighthouses. For history buffs, there’s an old Soviet bunker to explore, but mostly people come here to feel the sand between their toes and clear their heads. Thanks to the island’s microclimate, Hiiumaa is a lot warmer than Estonia’s mainland, which makes exploring the town of Kardia’s wooden houses and relaxing in Roograhu harbour’s floating sauna even more appealing.

Stay Kassari Puhkekeskus, doubles from £50, has bicycles to rent and a large sauna.

Getting there It’s a 35-minute flight from Tallinn or half-hour ferry ride from Rohuküla, details for both at hiiumaa.ee

Samothrace, Greece

DDR639 Doric Hieron temple, Sanctuary of the Great Gods on Oros Fengari (Mount Moon), Samothrace island. Northern Aegean Sea, Greece

The drums beat late into the night and oil torches flare at one of Samothrace’s many beach parties. Eyes closed, the smell of bonfires and tannic red wine transport you back to when life was dictated by the Temple of the Winged Nike, now a crumbling ruin. Its many repeat visitors love the unaffected nature of this north Aegean island. As well as a solid collection of hiking paths, a bucolic waterfall trail, and sweeping deserted beaches, the island’s hot springs and hillside thermal pools only add to the sense of otherworldliness.

Stay The Archondissa Boutique Beach Aparthotel is secluded and just 20 metres from the beach. Each room has a sizeable balcony and terrace, studios from ÂŁ40.

Getting there A Saos ferry from Alexandroupoli (on the mainland) takes three hours. Thessaloniki is six hours including drive and ferry.

Margaret Island, Budapest, Hungary

Margaret Island in Budapest Hungary

Margaret Island, in the middle of the Danube in central Budapest, spends winter shrouded in mist; come summer the island is an oasis in the midst the city. Encircled by a 5km asphalt running track and jetties from which to launch small boats (and bodies – some of the swimmers here are hardy folk), the illusion of an island holiday is enhanced by two thermal spa complexes. Both cost less than £10 for the day, and, after you’ve soaked, take a romantic walk around the island to visit the ruins of the 13th-century nunnery. At sunset grab an ice-cream and sit down to watch the fountains dance in time to the music.

Stay The Danubias Grand Hotel Margritsziget has doubles from ÂŁ68.

Getting there The island is a five-minute walk across the bridge from Budapest’s district IV.

The Dirty Dozen: 12 people who ruined Greece

As negotiations inch along between the Syriza government and Greece’s international creditors, the blame for the nation’s looming financial collapse would seem to rest entirely on the shoulders of Prime Minister Alex Tsipras and Finance Minister Yanis Varoufakis. But not really: History provides ample evidence that a long line of leaders, from Winston Churchill to Constantine II, helped make Greece the economic basket case it is today.

Here are some of the guiltiest culprits:
Konstantis and Georgios Mavromichalis (died 1831)

Konstantinos_Mavromichalis copy

When Greek-born Ioannis Kapodistrias was appointed independent Greece’s first governor in 1827, little did he realize that the job would be tougher than his former post as Russia’s foreign minister. Accustomed to working on the diplomatic stage, Kapodistrias soon found that his vision of a modern Greek state was not shared by everyone, especially the provincial elites.In 1831, he was stabbed in the stomach and shot in the head as he made his way to church by Konstantis and Georgios Mavromichalis. The killing was revenge for Kapodistrias’s jailing of their respective father and brother, the warlord Petrobey Mavromichalis. His assassination plunged Greece into chaos, leading the European powers to impose a foreign king, the young Bavarian prince Otto, on the young country, giving it a first taste of German rule.

Winston Churchill (1874–1965)

Churchill

In 1944, Greece’s leftist partisan movement managed to see the backs of the German army after three and a half years of brutal wartime occupation. Unbeknownst of them, British prime minister Winston Churchill and Soviet leader Joseph Stalin had secretly divvied up eastern Europe and the Balkans on a piece of paper, placing Greece within Britain’s sphere of influence. While communist leaders also bear responsibility, Churchill’s determination to restore the unpopular Greek monarchy, as well as his determination to exclude former communist partisans from the new Greek army, pushed Greece further down its calamitous path to civil war.

Constantine II (1940–)

Previews - Winter Olympics Day -3

Since Greece became a parliamentary republic in 1974, its former king has had no role in political or public life, to almost universal relief. Assuming the throne at the age of 23, Constantine caused enough damage from 1964 to 1967. Soon, he found himself at loggerheads with the centrist government, led by George Papandreou, who eventually resigned. Constantine then sought to create amenable governments using centrist party defectors, which fuelled a constitutional crisis and political instability that ultimately led to the 1967 military coup.

Georgios Papadopoulos (1919–1999)

George Papadopoulos

The weak state of Greek democracy was dealt a major blow in 1967 when a group of mid-level army officers, led by Colonel Georgios Papadopoulos, staged a successful coup d’état. Seven years of dictatorship followed, during which Papadopoulos himself was deposed in a coup by hardliners. While Papadopoulos would later die in prison, his asinine medical metaphors—he often likened himself to a doctor trying to cure a sick patient (Greece)—were redeployed by advocates of taking a tough line on Greece when crisis struck in 2009.

Andreas Papandreou (1919–1996)

Andreas Papandreou

Greece’s longest serving prime minister since the restoration of democracy in 1974, Andreas Papandreou left an indelible mark on Greek politics and its economy. Over the course of his decade in office (1981–89, 1993–96), the Harvard-trained economist introduced long overdue social and progressive reforms and stacked the civil service with his socialist Pasok party supporters. While he elevated many Greeks to the middle class, that success came at the heavy cost of drastically increasing the budget deficit and public debt levels. As corruption scandals mounted in the late 1980s, Papandreou created a sideshow by ditching his wife in favor of his airhostess mistress.

Kostas Karamanlis (1956–)

Supporters Rally For Greek New Democracy Party

Like many Greek prime ministers, Kostas Karamanlis became leader of the county largely on the strength of his surname – his uncle was prime minister and president at various stages from 1955 to 1995 – and because he promised to  “re-establish” the state. But in his five year tenure (2004–2009), few reforms were enacted, and the government lost control of Greece’s public finances. Had Karamanlis spent less time in front of his Playstation, as is widely rumored, maybe things could have been better. The rocketing budget deficit and debt-to-GDP ratio, which were continuously revised upward during and after his rule, paved the way for the next government to ask for a bailout.

George Papandreou (1952–)

Merkel Holds Talks With Papandreou

Prime minister like his father and grandfather before him, George Papandreou was elected in October 2009 using the vote-catching slogan “there is money,” despite being aware of the county’s dire economic situation. Unable to manage the ensuing fiscal crisis, Papandreou requested a €110 billion bailout deal from European Union and International Monetary Fund six months later. To the disbelief of most Greeks, the oblivious former leader attempted a political comeback in the 2015 election, in which he campaigned on an anti-austerity programme.

Akis Tsoschatzopoulos (1939–)

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Greece would be in a far worse place today had former interior minister Akis Tsochatzopoulos been successful in his bid to become prime minister in 1996. Luckily, he only came within six votes of replacing Andreas Papandreou as leader of the socialist Pasok party. In 2013, a court sentenced Tsochatzopoulos, now 75, to life imprisonment for pocketing €55 million in kickbacks from military procurements from 1996 to 2001, when he was defense minister. His wife, ex-wife, daughter, cousin, and business associates were all implicated in the scandal, most of whom were also jailed.

Greek oligarchs

Luxury expediton motor yatch "Luna" in Bodrum

With legacies extending back decades in cases, Greece’s oligarchs have emerged relatively unscathed from the Greek crisis and continue to control vast wealth, which is largely inherited but also derives from continued interests in shipping, communications, banking, construction and public works. This coterie of powerful Greek businessmen used political connections with former conservative and socialist governments to win contracts and restrict the Greek market. They also own and exert editorial control over most, if not all, of the privately-held media companies, in a country where public broadcasting remains largely under state control. The new Syriza-led government has promised to rein in the oligarchs, but some things are easier said than done.

Petros Kostopoulos (1954–)

Petros Kostopoulos

Businessman and flamboyant publisher Petros Kostopoulos gained fame during the media boom years in the 1990s. He introduced a series of highly popular lifestyle magazines to Athens that sought to break taboos and emulate urban fashions from more affluent western countries. The underlying message in his publications and editorials was one of unbridled consumerism. Cue the multiple credit cards, Cayenne Porsches, skiing holidays, extravagant home loans, and private swimming pools. All these status symbols became more attainable after Greece, one of the poorest countries in the European Union, adopted the euro in 2001, which gave its banks easier access to cheap money.

Nikos Michaloliakos (1957–)

Four MPs From The Far-Right Golden Dawn Party In Court

Relatively unknown until a few years ago, Nikos Michaloliakos and his neo-Nazi Golden Dawn party have capitalized on the Greek crisis to propel them to seats in the Greek and European parliaments. Appearing immune from the police or the justice system, Golden Dawn gangs patrolled inner-city streets, intimidating and sometimes beating migrants and political opponents. Only after a Golden Dawn supporter fatally stabbed the anti-fascist singer Pavlos Fyssas in 2013 did the state react by jailing Michaloliakos and several other Golden Dawn leaders, who will soon go on trial on charges of forming and running a criminal organization.

Troika

A protester shouts slogans during a rally against the government's decision to ask for an economic aid package in Athens

The troika – made up of the European Commission, European Central Bank, and International Monetary Fund – bears a fair share of the blame for Greece’s current state. The troika’s programs are based on over-optimistic growth projections, which have led to a number of revisions to Greece’s debt sustainability. Fiscal austerity has imposed a huge social cost upon the Greek people, pushing people out of work and into poverty, and leaving hundreds of thousands without access to public healthcare.

Washington guided Greece in bailout talks, envoy reveals

Washington had advised the previous SYRIZA-Independent Greeks government not to clash head-on with Germany and to show a willingness for reform in the weeks and months leading up to the July 13 agreement on a third bailout between Greece and its lenders.

A secret telegram sent to Athens by Greece’s Ambassador to the US, Christos Panagopoulos, on July 16 synopsized the relations between the two countries over the previous months. The copy seen by Kathimerini suggests that Washington showed a keen interest in keeping Greece in the eurozone and had consistently provided advice on how the government led by Prime Minister Alexis Tsipras should handle relations with the rest of the eurozone.

Washington, for instance, advised Athens to avoid verbal attacks on the German government and to try to create a broad alliance including countries like the UK, France, Italy and Austria. The US made it clear that the coalition would have to convince these countries that it was serious about implementing reforms if they were to then, in turn, offer their support.

Panagopoulos also explains in his note that Washington’s strategy was to stress the geopolitical importance of keeping Greece in the single currency and the need for the eurozone to agree a further reduction of Greek debt. The Greek ambassador suggests that the US government also encouraged the International Monetary Fund to be vocal on the issue of debt relief.

Sources also told Kathimerini that it was Washington who emphasized the geopolitical angle to the Greek issue through NATO. On June 19 NATO deputy Secretary General Alexander Vershbow said a Greek exit would “indeed have repercussions” for the alliance. He told a security conference in Bratislava that NATO was “worried about” a Grexit. His comments came just after Greece and Russia agreed a pipeline deal.

Panagopoulos describes in his telegram that there was frequent and extensive contact between Athens and Washington, including officials from the Treasury and the State Department, during the protracted negotiations that led to the signing of the third bailout in Brussels.

Varoufakis reveals cloak and dagger ‘Plan B’ for Greece, awaits treason charges

Former Greek finance minister Yanis Varoufakis claims he was authorised by Alexis Tsipras to look into a parallel payment system

A secret cell at the Greek finance ministry hacked into government computers and drew up elaborate plans for a system of parallel payments that could be switched from euros to the drachma at the “flick of a button” .

The revelations have caused a political storm in Greece and confirm just how close the country came to drastic measures before premier Alexis Tsipras gave in to demands from Europe’s creditor powers, acknowledging that his own cabinet would not support such a dangerous confrontation.

Yanis Varoufakis, the former finance minister , told a group of investors in London that a five-man team under his control had been working for months on a contingency plan to create euro liquidity if the European Central Bank cut off emergency funding to the Greek financial system, as it in fact did after talks broke down and Syriza called a referendum.

The transcripts were leaked to the Greek newspaper Kathimerini. The telephone call took place a week after he stepped down as finance minister.

“The prime minister, before we won the election in January, had given me the green light to come up with a Plan B. And I assembled a very able team, a small team as it had to be because that had to be kept completely under wraps for obvious reasons,” he said.

Mr Varoufakis recruited a technology specialist from Columbia University to help handle the logistics. Faced with a wall of obstacles, the expert broke into the software systems of the tax office – then under the control of the EU-IMF ‘Troika’ – in order to obtain the reserve accounts and file numbers of every taxpayer.

“We decided to hack into my ministry’s own software programme,” he said.

The revelations were made to a group of sovereign wealth funds, pension funds, and life insurers – many from Asia – hosted as part of a “Greek day” on July 16 by the Official Monetary and Financial Institutions Forum (OMFIF).

Mr Varoufakis told the Telegraph that the quotes were accurate but some reports in the Greek press had been twisted, making it look as if he had been plotting a return to the drachma from the start.

“The context of all this is that they want to present me as a rogue finance minister, and have me indicted for treason. It is all part of an attempt to annul the first five months of this government and put it in the dustbin of history,” he said.

Yanis Varoufakis (right), Greece’s former finance minister, with Prime Minister Alexis Tsipras

“It totally distorts my purpose for wanting parallel liquidity. I have always been completely against dismantling the euro because we never know what dark forces that might unleash in Europe,” he said.

The goal of the computer hacking was to enable the finance ministry to make digital transfers at “the touch of a button”. The payments would be ‘IOUs’ based on an experiment by California after the Lehman banking crisis.

A parallel banking system of this kind would allow the government to create euro liquidity and circumvent what Syriza called “financial strangulation” by the ECB.

“This was very well developed. Very soon we could have extended it, using apps on smartphones, and it could become a functioning parallel system. Of course this would be euro denominated but at the drop of a hat it could be converted to a new drachma,” he said.

AFP PHOTO / LOUISA GOULIAMAKI

Mr Varoufakis claimed the cloak and dagger methods were necessary since the Troika had taken charge of the public revenue office within the finance ministry. “It’s like the Inland Revenue in the UK being controlled by Brussels. I am sure as you are hearing these words your hair is standing on end,” he said in the leaked transcripts.

Mr Varoufakis said any request for permission would have tipped off the Troika immediately that he was planning a counter-attack. He was ready to activate the mechanism the moment he received a “green light” from the prime minister, but the permission never came.

AFP PHOTO / Angelos Tzortzinis

“I always told Tsipras that it will not be plain sailing but this is the price you have to pay for liberty,” he told the Telegraph .

“But when the time came he realised that it was just too difficult. I don’t know when he reached that decision. I only learned explicitly on the night of the referendum, and that is why I offered to resign,” he said. Mr Varoufakis wanted to seize on the momentum of a landslide victory in the vote but was overruled.

He insisted that his purpose had always been to go on the legal and financial offensive within the eurozone – placing Greece’s eurozone creditors in a position where they would be acting outside EU treaty law if they forced Grexit – but nevertheless suggested Syriza did have a mandate to contemplate more radical steps if all else failed.

“I think the Greek people had authorised us to pursue energetically and vigorously that negotiation to the point of saying that if we can’t have a viable agreement, then we should consider getting out,” he said in the tape.

“[German finance minister Wolfgang] Schauble believes that the eurozone is not sustainable as it is. He believes there has to be some fiscal transfers, some degree of political union. He believes that for that political union to work without federation, without the legitimacy that a properly elected federal parliament can render, can bestow upon an executive, it will have to be done in a very disciplinary way.

“And he said explicitly to me that a Grexit is going to equip him with sufficient terrorising power in order to impose upon the French that which Paris has been resisting: a degree of transfer of budget-making powers from Paris to Brussels.”

Mr Varoufakis told the Telegraph that Mr Schauble had made up his mind that Greece must be ejected from the euro, and is merely biding his time, knowing that the latest bail-out plan is doomed to failure.

“Everybody knows the International Monetary Fund does not want to take part in a new programme but Schauble is insisting that it does as a condition for new loans. I have a strong suspicion that there will be no deal on August 20,” he said.

He said the EU authorities may have to dip further into the European Commission’s stabilisation fund (EFSM), drawing Britain deeper into the controversy since it is a contributor.

By the end of the year it will be clear that tax revenues are falling badly short of targets – he said – and the Greek public ratio will be shooting up towards 210pc of GDP.

“Schauble will then say it is yet another failure. He is just stringing us along. He has not given up his plan to push Greece out of the euro,” he said.

These 3 headlines from today’s Greek press give you an idea of just how devastating the crisis has been

Let’s take a break from the blow-by-blow coverage of negotiations between Greek prime minister Alexis Tsipras and his creditors at the EU and the IMF.

Presented without further comment, are three headlines from today’s news as published by Ekathimerini, a local service that publishes in English.

Blame who you want for the debt crisis, but here’s the human cost.

Those kids didn’t run up that debt:

Yep. They’re running out of food in some places:

The number of small and medium-sized business in Greece has dropped by 27% since 2008.

Inflation gone wild: The 5 most extreme cases of hyperinflation

Would you believe that at one point in Hungary’s history, prices of goods could double in just 15 hours? Or that in 1923 Germany a loaf of bread cost 200 billion marks? Or that Zimbabwe’s former currency has been printed in denominations as high as 100 trillion?

These are real-life historical examples of hyperinflation – when a country experiences extremely high and rapidly accelerating rates of inflation.

As the video below explains, most economists believe that too much inflation or deflation is bad for an economy, but “a small, consistent amount of inflation is necessary to encourage economic growth.” So while the word inflation has somewhat of a negative connotation, many central banks accept or even aim for just a little bit of inflation (generally 1-3%).

Inflation above 3%, however, can be problematic for an economy. Although rare, there have been instances when inflation reached levels astronomically higher than 3%, and entire currencies collapsed. Examples of these instances demonstrate just how detrimental inflation can be to a country’s economy and citizenry. Here are the five most extreme cases of hyperinflation ever recorded.

1. Hungary, 1945-46

hungarian-inflation

Highest monthly inflation rate: 13,600,000,000,000,000%
Highest currency denomination: One trillion
Time it took prices to double: 15.6 hours

Hungary’s hyperinflation of 1945-46 was the most severe instance of hyperinflation in history. Costs of preparing for World War II led to loose monetary policy and depreciation of the Hungarian pengő currency. At the end of the war the Hungarian government began rampantly printing money.

Denominations got so high that milpengő (1 million pengő) and bilpengő (1 billion pengő) denominations were introduced to reduce the number of zeros and make calculations easier. Prices could more than double in just one day. A new currency called the forint was introduced in 1946, and old pengő were littered in the streets.

2. Zimbabwe, 2007-8

zim-dollar

100 trillion Zimbabwean banknote

Highest monthly inflation rate: 79,600,000,000%
Highest currency denomination: 100 trillion
Time it took prices to double: 24.7 hours

Zimbabwe’s inflation problems began in the early 1990s when a government program to redistribute land from white Zimbabwean landowners to black farmers led to drops in food production and the collapse of the banking sector.

President Robert Mugabe’s government also printed money to pay off loans and fund the country’s military involvement in the Democratic Republic of the Congo and the Second Congo War. The money printed was also used to pay higher salaries to army and government officials.

In 2006, the New York Times reported that a roll of toilet paper cost 145,750 Zimbabwean dollars or “Zim dollars”. Some Zimbabweans may have actually used Zim dollars as toilet paper – a photo of a sign posted over a public toilet in South Africa reading “TOILET PAPER ONLY – NO ZIM DOLLARS” circulated on the internet at one point.

In the late 2000s, Zimbabweans began using foreign currencies instead of Zim dollars, and in 2009 the currency was abandoned completely. To this day, Zimbabwe still uses foreign currencies and has no national currency.

3. Yugoslavia/Republika Srpska, 1989-1994

yugoslavia-dinar

500 billion dinar banknote

Highest monthly inflation rate: 313,000,000%
Highest currency denomination: 500 billion
Time it took prices to double: 1.4 days

After a breakup of the country, a series of regional conflicts, and an embargo by the United Nations, Yugoslavia’s economy crumbled. The central bank attempted to print its way out debt, which spiraled out of control and resulted in hyperinflation.

The cost of living multiplied by 6 trillion in less than a year. In effort to remedy the inflation, new dinars were introduced, with the new dinar being equivalent 1,000,000 old dinars. More new dinars were subsequently introduced; in total, the currency was revalued five times.

“For a sense of the impact on the local population, imagine the value of your bank accounts in dollars and then move the decimal point 22 places to the left. Then try to buy something,” writes Steve H. Hanke of the CATO Institute.

4. Germany (Weimar Republic), 1921-24

german-mark

50 million mark banknote

Highest monthly inflation rate: 29,500%
Highest currency denomination: 100 trillion
Time it took prices to double: 3.7 days

After being defeated in World War I, Germany was required to pay reparations in the form of gold or foreign currency. The Reparations Commission would not accept German Papermarks, or “marks”, which were rapidly depreciating in value due to the German government’s misguided monetary policy to pay for the war.

One of Germany’s strategies was to print mass amounts of marks and then buy foreign currency with them. In August 1921, hyperinflation set in as Germany began purchasing foreign currency for any amount of marks. The exchange rate continued to fall, meaning more and more Marks were required to buy the foreign currency, and in turn more and more marks were printed.

At one point there were so many marks in circulation that they had to carried in large sacks or even wheelbarrows. As one story goes, a man left his wheelbarrow full of marks outside and later saw that the wheelbarrow had been stolen but the marks remained.

5. Greece, 1941-45

greek-drachma

“5.000.000 drachmas, 1944” by Tilemahos Efthimiadis via Flickr, used under a Creative Commons license

Highest monthly inflation rate: 13,800%
Highest currency denomination: 100 billion
Time it took prices to double: 4.3 days

World War II put Greece into tremendous debt (are you seeing a pattern here?). When Greece was invaded and occupied by the Axis powers, the country suddenly had to support 400,000 Axis soldiers and owed the powers a huge indemnity. In addition, national income in Greece fell drastically and tax revenues slid. The Greek central bank printed its drachma currency to cover these costs and pay off its debt, and by 1943 hyperinflation had set in.

By 1944, citizens only held onto their drachma for an average of four hours before spending it, compared to 40 days in 1938.

More than half of Germans support Angela Merkel’s tough stance on Greece

A Spiegel mĂĄrciusi, botrĂĄnyos cĂ­mlapja, amin arra utaltak, hogyan lĂĄtjĂĄk NĂŠmetorszĂĄgot EurĂłpĂĄban

A poll conducted in Germany has found that more than half of Germans agree with Chancellor Angela Merkel’s position on negotiations with Greece.

And almost all of those surveyed said that they doubted whether Greece would actually implement the sweeping reforms, which were agreed upon during marathon all-night negotiations between Eurozone leaders on Sunday night.

The survey, conducted by German polling company Forsa for weekly news magazine Stern, asked 1,001 people about their opinions on Merkel’s approach to the Greek crisis.

55 per cent said they believed Merkel’s tough attitude to Greece during the negotiations was correct, and almost one third wished that she had taken a much tougher line, by forcing Greece out of the Eurozone.

Only 14 per cent of respondents believed that Greece would actually implement the reforms, which include privatisation of the national electricity network, heavily boosting tax revenue and slimming down the generous pension system – the kind of austerity measures that 61 per cent of Greeks voted against in the referendum on 5 July.

81 per cent said they had serious doubts that the long list of major reforms would actually be implemented.

Oddly, Merkel found high levels of favour amongst supporters of Germany’s Green Party, one of the parties in opposition in the German parliament, the Bundestag.

Two-thirds of Greens said they supported her position – a similar figure to the level of support over the Greece issue within her own Christian Democratic Union party.

While other major Eurozone countries, such as France, presented themselves as allies of Greece in the run-up to the negotiations, the German delegation took a noticeably hard line, pushing for a set of major economic reforms, with finance minister Wolfgang Schäuble putting forward the suggestion that Greece could temporarily leave the Eurozone if the measures were not put in place within a strict timetable.

Reaction in Germany appeared mixed. Some Germans, as evidenced by the poll, backed the tough measures. Others thought they were overly harsh, and amounted to a German effort to humiliate and punish Greece, with major German paper Der Spiegel claiming that over the weekend’s negotiations,

“the German government destroyed seven decades of post-war diplomacy on a single weekend.”

Others criticised the fact that there was a deal in the first placed – the front page of Germany tabloid Bild, the day after the election, carried the headline:

‘Merkel saves Greece with our money’. The paper said that Greece will never pay back its third bailout, which must be voted on in European parliaments before it goes ahead.

First Bitcoin ATM in Greece Promises Limitless Transactions Amidst Capital Controls

First Bitcoin ATM

The first 2-way bitcoin ATM was inaugurated in downtown Athens on Saturday at The Cube, a coworking space that houses several innovative startups. And many find that through this very ATM they can overcome Greece’s capital controls.

The 2-way (bitcoin to euro and vice versa) ATM machine was installed by Spanish startup company Bitchain. Joaquin Fenoy, the company’s 36-year-old chief technology officer (CTO), believes that installing the machine might help Greeks during the crisis.

After the implementation of capital controls, Greek citizens are able to withdraw only 60 euros per banking account. But this doesn’t apply to bitcoin.

“It is a system that cannot be controlled,” noted Bitchain CTO Joaquin Fenoy at the inauguration event.

“People are not limited, here” he added. In fact, as he was speaking, a young man was able to withdraw 120 euros from his bitcoin wallet, which is double the amount Greeks are allowed to withdraw from banks on a daily basis.

The crypto currency might be helpful especially to the young entrepreneurs who cannot fulfill payments abroad because of the recent limitations.

Bitcoin_Grece_ATM

The bitcoin is a completely digital currency. It is not available in any physical form of coins or banknotes. It is not produced by any particular country and not controlled by any particular bank.

Production, storage, handling and all transactions with bitcoin are exclusively in electronic form. In more technical terms, the bitcoin is a peer-to-peer payment system and a digital open source exchange, invented by Satoshi Nakamoto in 2008.

According to Adrian Verde, who also works with Bitchain, the ATM allows people to store their own money with 0% commission fees.

“The banks are withholding the people’s own money and a bitcoin ATM machine could help in such a situation,” he said.

First Bitcoin ATM1

The event was attended by several curious Greeks who wanted to know more about the bitcoin and be one of the first people to use the machine. Two university students, Dimitris and Aris, were excited by the prospect.

However DImitris noted that such technology may need more time to grow in Greece, since people are more used to “real money” and they are often suspicious of online transactions.

But for Petros, the bitcoin has created an online community without limits and borders.

“Bitcoin ATMs are an easy way to send money abroad and make transactions online, two things that are currently not allowed in Greece due to the capital controls,” he said.

He also noted that the transactions are safe and transparent since the system allows users to see any transaction that has been completed since the bitcoin first made an appearance in 2008.

Petros also noted that the bitcoin, via the newly installed ATM in Greece, can be used in many ways to help the country during the crisis.

The digital currency could be used by international corporations that wish to send money to their Greek offices for actions in Greece, or businessmen from other countries can invest in Greek startups or other companies.

“It is a peer-to-peer system with no delays that is based on trust,” Petros said. “I believe that Greeks will be able to learn to use and trust bitcoin.”

“They learnt to use Google, why not this?” he concluded.

Europe’s Debt Problem Has Deeper Roots Than Greece

Greek Prime Minister Alexis Tsipras, center, talks with German Chancellor Angela Merkel and French President Francois Hollande at the start of eurozone leaders' summit on the Greek crisis in Brussels on Sunday.
Greek Prime Minister Alexis Tsipras, center, talks with German Chancellor Angela Merkel and French President Francois Hollande at the start of eurozone leaders’ summit on the Greek crisis in Brussels on Sunday

Currency bloc still searching for lasting solution to high debts. Greece has a deal—or rather, it has a chance to have negotiations on a deal. But Europe still hasn’t found a lasting solution for Greece’s debt burden—a missing piece in the eurozone’s crisis armory.

Greece’s third bailout might run to as much as €86 billion. But to even start talks on that financing, the Greek parliament must pass reams of legislation by Wednesday, including mechanisms for semiautomatic spending cuts if the country fails to hit fiscal targets.

Only emergency bridge financing will prevent a default on the European Central Bank. Greece’s debt, however, remains a problem that hasn’t been fully addressed.

The real issue isn’t the amount of debt, even though Greece’s total debt stood at 177% of gross domestic product in 2014 and it already owes other governments, the International Monetary Fund and the European Central Bank €246 billion, according to Deutsche Bank. It is the constraints the euro places on managing debt.

Europe has ruled out face-value reductions, and even a softening of terms—longer maturities or grace periods—will have to wait until a new program is in place, under way and has undergone a positive first review.

Such measures can be significant, and Greece has already benefited from them, reducing its financing costs. But the sheer scale of Greece’s debt remains a political flash point.

There are usually several ways of attempting to fix a government debt problem, including growth, inflation, austerity, and restructuring. The most palatable is growth: ideally, a country could grow into its debt burden, making it sustainable.

Over time, economic reforms could boost Greece’s growth, and are desperately needed. But this is no quick fix; it involves unpopular political choices.

Inflation is no way out: the European Central Bank’s mandate sees to that. True, inflation dynamics vary from country to country. But for now, it may well be Germany, where government debt is already falling, that sees higher inflation.

That leaves austerity and restructuring. Austerity in small doses is bearable, but has clearly tested political limits in Europe. And restructuring is a costly option for an advanced-economy bloc.

The lesson from Greece is that while eurozone members can force losses on private-sector bondholders, they cannot do the same when it comes to loans from other governments. Indeed, the only way to do so appears to be to leave the euro and default.

An outright reduction in debt would otherwise put the eurozone on the road to a fiscal union that no government or voter has agreed to.

The euro effectively attempts to enforce ascetic virtue on debtors: they cannot devalue or inflate away the value of their debt, so instead they are forced to reform their economies.

The worry is that Greece isn’t the only highly-indebted member of the eurozone; a renewed economic downturn could prove challenging for others.

That might expose further the limitations imposed by the euro. But for now it puts the onus squarely on Greece to reform its economy, and fast.

Greek debt crisis: Goldman Sachs could be sued for helping hide debts when it joined euro

Goldman Sachs faces the prospect of potential legal action from Greece over the complex financial deals in 2001 that many blame for its subsequent debt crisis.

A leading adviser to debt-riven countries has offered to help Athens recover some of the vast profits made by the investment bank.

The Independent has learnt that a former Goldman banker, who has advised indebted governments on recovering losses made from complex transactions with banks, has written to the Greek government to advise that it has a chance of clawing back some of the hundreds of millions of dollars it paid Goldman to secure its position in the single currency.

The development came as Greece edged towards a last-minute deal with its creditors which will keep it from crashing out of the single currency.

The deal is based on fresh economic reform proposals submitted by Athens which bear a striking similarity to the creditors’ offer rejected by the Greek people in a referendum last Sunday – sparking claims that Prime Minister Alexis Tsipras has effectively executed a huge U-turn in order to avoid a catastrophic “Grexit”.

Greece managed to keep within the strict Maastricht rules for eurozone membership largely because of complex financial deals created by the investment bank which critics say disguised the extent of the country’s outstanding debts.

Goldman Sachs Manhattan headquarters
Goldman Sachs Manhattan headquarters

Goldman Sachs is said to have made as much as $500m from the transactions known as “swaps”. It denies that figure but declines to say what the correct one is.

The banker who stitched it together, Oxford-educated Antigone Loudiadis, was reportedly paid up to $12m in the year of the deal.

Now Jaber George Jabbour, who formerly designed swaps at Goldman, has told the Greek government in a formal letter that it could “right historical wrongs as part of [its] plan to reduce Greece’s debt”.

Mr Jabbour successfully assisted Portugal in renegotiating complex trades naively done with London banks during the financial crisis.

His work helped trigger a parliamentary inquiry and cost many senior officials and politicians their jobs. It also triggered major compensation payments by banks to the Portuguese taxpayer.

Pensioners stand outside a closed branch of the Greek National bank in Thessaloniki on June 29, 2015
Pensioners stand outside a closed branch of the Greek National bank in Thessaloniki on June 29, 2015

Mr Jabbour, who now runs Ethos Capital Advisors, has also helped expose other cases including allegations against Goldman Sachs and Société Générale over their dealings with Libya relating to financial transactions that left the country’s taxpayers billions of dollars out of pocket. Both banks deny wrongdoing.

Antigone (Addy) Loudiadis
Antigone (Addy) Loudiadis

Based on publicly available information, he believes the size of the profit Goldman made on the transactions was unreasonable. Scrutiny and analysis of the documents and email exchanges could give Greece grounds to seek compensation and assess if the deals were executed for the sole purpose of concealing the country’s debts.

Greece’s membership of the euro gave it access to billions of easy credit which it was then incapable of paying back, leading to its current crisis. Lenders took its euro membership as a stamp of creditworthiness, but the true state of its economy was far less healthy.

Under Ms Loudiadis’s guidance, Goldman swapped debt issued by Greece in dollars and yen for euros which were priced at a historical exchange rate that made the debt look smaller than it actually was. The swaps reportedly made about 2 per cent of Greece’s debt disappear from its national accounts.

The size and structure of the deal enabled the bank to charge a far bigger fee than is usual in swap transactions, and Goldman persuaded Greece not to test the transaction with competitors to ensure it was getting good value for money.

The cash situation in Greece is so bad that they’ve started using Bulgarian lev

Pensioners are given priority tickets by a National Bank official (C), as they wait to receive part of their pensions in Athens , Greece July 10, 2015. The Greek parliament will give the government a mandate to negotiate with creditors for a cash-for-reforms deal, the parliamentary spokesman of the ruling Syriza party told reporters on Friday.

Euros are running so low in Greece that shops and restaurants are accepting Bulgarian and Turkish currencies, according to reports. The EU Observer reports that shops and restaurants in Greece are accepting the Bulgarian lev from foreign tourists instead of the euro, while the FT reports that some businesses are accepting the Turkish lira too.

Despite hopes of reaching a deal over the weekend, Greece is days away from running out of cash and both business and consumers are being forced to find new ways to keep the wheels of commerce turning to allow them all to buy food.

Dimitris Hadalis, president of a group for small hoteliers on the Halkidiki peninsula, told the FT: “We do accept lev — there is a line from the Greek tourist confederation and from the association of Greek hotels that we have to do anything to encourage tourists.”

The Bulgarian Lev is particularly appealing because it is pegged to the euro, meaning it’s easy and safe to convert prices. €1 is worth 1.95 Bulgarian Lev.

Freshly produced coins of 50 stotinki ($0.35) are seen at the National Mint in Sofia May 13, 2009. Bulgaria operates in a currency board regime, which pegs its lev currency to the euro.
REUTERS/Oleg PopovFreshly produced coins of 50 stotinki ($0.35), Bulgaria’s equivalent of the 50 pence coin.

Bulgaria also borders Greece to the north, meaning there’s a relatively steady flow of tourists from the Central European nation come to Greece.

There’s been speculation that Greece could introduce a parallel currency or digital currency if things get any worse.

But the government has played this down and former Finance Minister Yanis Varoufakis was reportedly pushed out for suggesting this.

The UK government has told tourists planning to visit Greece to take enough cash to last for an entire holiday.

Greeks are panic queuing at ATMs because they have seen cash disappear into thin air before

greek atm
A bank manager points as pensioners wait in front of a National Bank branch to receive part of their pensions at an Athens neighborhood, in Greece July 9, 2015.

Greece’s banks only have enough money to keep the country going until Monday. The country has extended its capital controls, which include shutting banks and restricting personal cash withdrawals to €60 (ÂŁ43.24, $66.62) until then.

Banks are being flooded by Greeks, mainly pensioners. Greeks remember all too well the 1999 Athens Stock Market crash, when investors lost substantial amounts of their savings, just before Greece joined the Euro.

While it’s looking more and more likely that Greece will actually strike a deal with its creditors, after Greece submitted its latest bailout proposal to its European creditors ahead of a midnight deadline on Thursday, people are still panic-queuing at their banks’ ATMS across the country.

A report a week ago suggested that the country’s banks had just €500 million (ÂŁ361 million, $556 million in physical cash left, so people are likely to worry that there is simply not enough cash in the bank to cover all their savings and other deposits.

As Business Insider’s Mike Bird pointed out during his visit to Athens last week, the stock of deposits is now less than half of what it was at the peak in 2009, at the end of Greece’s post-euro-entrance boom.

“A lot of the money that left the banks in 2010-2012 went out the country,” said Syriza activist Mihalis Panayiotakis, a member of the governing party’s digital-policy committee, to Mike Bird last week. “Also, companies relocated. That money never came back.”

Here’s a chart showing the slump in deposits against physical cash in circulation:

Greece deposits

The more vulnerable people in Greek society, the poor and pensioners, are worried that the little cash they have might disappear. After all, that happened in Cyprus in 2012 and 2013, when the government imposed a one-time tax on remaining bank deposits on all uninsured deposits.

On top of that, Greece may look likely that it is nearing a deal with its creditors, but this is not certain — just take a look at what happened with the call for the bailout referendum, even though that turned out to be completely pointless in the end.

Many investment banks are now looking at a Grexit — Greece leaving the euro — as the base case scenario. This is a huge deal because it could really hit everyday Greeks and the little money they have left. That’s not to mention the banks’ meagre amount of bank deposits.

On Sunday (July 5), Barclays said in a research note that Greece would almost certainly default on its debt and maybe exit the EU, ultimately abandoning the euro and therefore being forced to re-adopt its old currency, the drachma, and use IOUs to recapitalise its banking system.

Then on Wednesday (July 8), the bank stepped up its warning and said it is afraid the Greek government is on the verge of collapse.

Barclays reckons that it is now more likely that there will a Grexit than not. However, it pretty much predicts financial and economic chaos over the next month:

1) banks run out of euro cash within days (five days, according to development minister George Stathakis);

2) default on the ECB holdings of SMP bonds appears inevitable

3) banks turn insolvent as the ECB shuts down ELA, no later than 20 July – at this point, Greek banks need both a liquidity and capital injection

4) issuance of IOUs to pay public wages and pensions could happen as early as this month. 

Even the man who coined the term “Grexit,” Citi chief economist Willem Buiter, now thinks a Greece exit from the eurozone is the most likely outcome, or Citi’s base case, just three months after the bank said an exit was “unlikely.”

So that means, Greeks are increasingly facing the prospect of not only losing their deposits but also not being given their salaries. On top of that, switching to the drachma will create total and utter chaos.

My colleague Mike Bird outlined the financial turmoil that would ensue if Greece falls (or is pushed) out of the euro. From money running out, to the development of black markets — it’s worth a read to see the potential chaos.

While it may look like Greeks are panicking for no reason at the ATMs, they all have a very legitimate fear right now. And over the next two weeks, when Greece’s July 20 payment is up, they find themselves without any cash to withdraw.

Countdown to Grexit deadline day

EU leaders have given Greece until the end of the weekend to reach an agreement with its creditors or face crashing out of the euro.

Athens formally submitted a request for a new three-year bailout to the eurozone’s €500bn bailout fund on Wednesday, the first of many steps it has to complete before eurozone and EU leaders gather in Brussels on Sunday to decide its fate.

Here are the other deadlines it has to meet to salvage its place in the single currency and avert the biggest crisis in the EU’s history.

In their letter to the bailout fund, known as the European Stability Mechanism, Greek authorities vowed to “set out in detail its proposals for a comprehensive and specific reform agenda” by Thursday.

These are the “prior actions” that so bedevilled the bailout talks before Alexis Tsipras, the Greek prime minister, walked away from the negotiating table and called a referendum on the creditors’ proposal last month.

Eurozone leaders have warned that these new prior actions must be more comprehensive than those negotiated only two weeks ago — for an obvious reason. The previous bailout talks were over a single, final €7.2bn tranche in Greece’s old bailout.

These reforms will be part of a new, multiyear programme — the kind of thing that is normally negotiated over a period of weeks, if not months.

Under the treaty governing the ESM — Greece’s two previous bailouts were granted before the bailout fund even existed — the European Commission “in liaison with the ECB” must evaluate any request for aid before it goes to national capitals for consideration. With time running out, that evaluation must occur in just 24 hours, on Friday.

Angela Merkel, the German chancellor, went out of her way on Tuesday to highlight the issues the commission must consider in its evaluation — including whether there is a “risk to the financial stability of the euro area as a whole”, a line Berlin insisted on during the debate over the ESM treaty. Germany has long argued that bailouts should only be forthcoming if the entire eurozone is threatened.

In many ways, this is a more critical day than Sunday’s summit. Under the ESM treaty, it is the ESM’s board of governors — the eurozone’s 19 finance ministers — who decide whether formal negotiations should begin. Under the timetable agreed by eurozone leaders on Tuesday night, eurozone finance ministers will meet on Saturday to make this very determination.

If the board of governors decide there is enough in the Greek proposal to start talks, they then task the trio of bailout monitors — the European Commission, ECB and “whenever possible” the IMF — to start talks over a new “memorandum of understanding”, a politically poisonous phrase in Greece that has come to stand for the tough austerity measures the country has lived under for the last five years.

If eurozone finance ministers agree to start bailout talks, Sunday’s summit of EU leaders may not even be needed, according to eurozone officials.

After all, despite Mr Tsipras’ repeated insistence that a “political agreement” was needed at the highest levels, almost all bailout decisions are delegated to finance ministers.

But if no deal is struck on Saturday, leaders from all 28 EU countries have been summoned to Brussels to sort out the mess on Sunday.

According to EU officials, one of the most important things they will be asked to decide on is a humanitarian relief programme for Greece, something that may be needed amid rising shortages of medicines and, potentially, food and fuel.

This day will look very different depending on whether Grexit has been avoided or not. If a deal gets the green light from finance ministers on Saturday, there are several countries — including Germany, Finland and the Netherlands — which still need parliamentary approval before such permission is officially granted.

This has always been a concern in Germany, where Ms Merkel’s own Christian Democratic bloc has grown increasingly restive.

The Bundestag, which is currently on a month-long July recess, will have to be called back into session on Monday, to vote on any agreement. If no deal is agreed at the weekend, Monday’s focus instead turns to the ECB.

With the prospect of a major Greek government default and bankruptcy imminent, the central bank’s governing council will in all likelihood be convened to withdraw the €89bn in emergency loans currently keeping Greek banks alive. Grexit would ensue.

Greece and all of Europe are in uncharted waters

alex tsipras angela merkel
German Chancellor Angela Merkel and Greek Prime Minister Alexis Tsipras during Tsipras’ first official trip to Germany in March

Greece has voted “No” to its international creditors’ bailout proposal, supporting the left-wing Syriza Government in a high-stakes referendum.

The Sunday poll, in which Greece voted “No” to its international creditors’ bailout proposal, showed a clear rejection of creditor terms: 61% voted “No,” and just under 39% voted “Yes.” What this result will mean politically, however, is a rather more open question.

One reason has to do with the main actors of the German elite who seem to have presented a conflicted and confused response to the result.

For instance, the German Vice Chancellor Sigmar Gabriel told the Tagesspiegel newspaper that “the Greek Government is leading the Greeks on a path of bitter sacrifice and hopelessness.”

Yet Germany’s hardline finance minister, Wolfgang Schaeuble, stated rather surprisingly that Greece could exit the eurozone “temporarily.”

Similar cautious remarks were also reiterated by the German foreign minister Frank Walter Steinmeier, who stated in Tagesspiegel am Sonntag that a Grexit would be a “disastrous signal to countries outside the European Union.”

Angela Merkel on her part made no public statements, yet her awareness of the negative geopolitical consequences of a Grexit is well-known.

The Chancellor is also aware of the fact that a Grexit will end the dream that eurozone membership is irrevocable. But again, how Germany’s leadership especially Angela Merkel will respond is still a puzzle, despite the Chancellor’s track record on managing the passing of unpopular legislation.

This last point is especially relevant in case Greece requires a new bailout.

But there is another reason behind the uncertainty. If Greece exits the euro, it will most likely be what the Economist Intelligence Unit calls a “de facto” exit as opposed to a de jure exit.

A de facto exit means that a “No” vote would increase the likelihood of Greece defaulting on the ECB on July 20th.

Greece would then be cut off from the ECB’s ELA program, default on private creditors, and issue a parallel currency which will circulate alongside the euro.

With an increasing need to print domestic scrip, Greece will have exited the monetary union, at least in de facto terms.

Such a scenario can be reversed, since it is up to the Greek government to set a conversion rate between the euro and the scrip and re-denominate contracts. Consequently, whether Greece will be in or out of the euro will be an open question.

Yet the uncertainty does not end here. Even if a de facto exit occurs, Greece would continue to be legally (de jure) a member of EMU, and may face significant uncertainty over its status.

This is due to the fact that the nation could use treaty provisions to argue that it was illegally forced out of the euro by its peers, while its peers could accuse Greece of violating treaty provisions by issuing a parallel currency.

Consequently, the legal debate will be protracted and its outcome will be highly uncertain, to say the least.

In conclusion, if there is one concept that sums up the road ahead for Greece and Europe it is that of uncertainty. The latter is even more true due to the current polarized nature of Greek politics.

Such polarization will embolden the radical voices within Syriza to harden their stance towards Tsipras, and by consequence his stance towards the creditors.