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Summary

  1. European stock markets close sharply lower
  2. EC chief Jean-Claude Juncker feels 'betrayed' by Greek 'egotism'
  3. Osborne: UK 'prepared for the worst'
  4. Angela Merkel 'open to more talks' with Greece

Live Reporting

By Chris Johnston

All times stated are UK

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Will stocks continue to fall?

Analysts remain divided on the impact of Greece defaulting on its debts. Alan Skrainka, chief investment officer at Cornerstone Wealth Management, said the relatively small size of the Greek economy means "it offers very little risk for the global economy or for the rest of Europe." But Bill Lynch, director of investment at Hinsdale Associates, says there is still "a lot of nervousness in terms of how all this is going to play out."

Wall Street rocked by Greece

Shares in Wall Street have extended their losses, closing down further as fears of the impact of a Greek exit from the eurozone intensify. The Dow Jones closed 2% lower at 17,596, with the S&P 500 losing 2.1% to 2,057. The tech-heavy Nasdaq also lost 2.1% to close at 2,057.

ECB says it's ready to help

The European Central Bank is ready to use all available instruments to help Greece if needed, vice-president Benoit Coeure has said in an interview with French newspaper Les Echos. He also reiterates that if the Greeks vote "yes" in Sunday's referendum, he has no doubt that the eurozone will find ways to meet its commitments towards Greece.

More Tsipras

Greek journalist Nick Malkoutzis tweets:

#Tsipras says he will respect any outcome of referendum & will "put in process motion foreseen by Greek Constitution" #Greece #euro

Tsipras TV interview

Interviewed on Greek television tonight, Alexis Tsipras says he does not believe that the country's creditors want Greece to leave the eurozone, mainly because the cost of such action would be huge. The Greek PM's aim for Sunday's referendum is to bring a continuation of negotiations with its lenders, he adds. The stronger it rejects the deal on offer, the stronger Greece's hand in talks becomes, Mr Tsipras says.

More souvlaki please...

The BBC's Joe Miller reports from central Athens: 

Athens protest

Quite a big turnout - an estimated 17,000 people - for a pro-Syriza rally in the Greek capital tonight.

Athens rally
Getty Images

Cause and effect

Reader Alan Fowler writes:

Moscow is watching...

Things really must be grim if Russia is getting worried. "Moscow is watching developments in the European Union very closely in the context of the financial crisis in Greece," said Kremlin spokesman Dmitry Peskov. "We are concerned about the possible negative consequences for the whole of the EU."

Tusk warning to Greece

Donald Tusk
Getty Images

European Union President Donald Tusk has warned the Greek people that voting no in the referendum will not give their government more leverage to seek a better bailout deal: "Every government has a right to hold a referendum, therefore we respect the Greek decision. However, one thing should be very clear: if someone says that the government will have a stronger negotiating position with the `no' vote, it is simply not true. I'm afraid that which such a result of referendum, there will be even less space for negotiation."

S&P cuts Greece

More bad news for Greece: Standard & Poor's has cut its rating on the country's government debt further into junk territory - from CCC to CCC-, saying the probability of Greece leaving the eurozone was now about 50%. S&P said Greece is likely to default on its commercial debt during the next six months.

London protest

Here's a link to the Periscope video that Guardian columnist Owen Jones made earlier at the Solidarity for Greece rally in Trafalgar Square.

Greeks 'fed up with being bullied'

Professor Robert Arnott of Oxford University responds to an earlier reader comment :

'Time to stop posturing'

Reader Richard Bevan writes: 

China on Greece

Li Keqiang
Getty Images

First Obama, now the Chinese premier wants Greece to stay in the euro. "China wants to see Greece stay in the eurozone and we urge relevant creditors to reach agreement with the Greek government at an a early time," Li Keqiang (pictured left) said after a summit with EU leaders in Brussels.

UK banks 'prepared'

Athens
Getty Images

British banks can weather the Greek storm, George Osborne said today. "The UK banking exposure to Greece is dramatically less than it was in 2012," the Chancellor told MPs. "Less than 1% of the core tier-one capital of the UK banks is in Greek debt and I think they are well prepared for whatever eventualities unfold."

No IMF payment

No great surprise, but a Greek government official says Greece will not pay an IMF loan repayment due on Tuesday.

... but take cash anyway

Greece: take sufficient Euros in cash...please take appropriate security precautions against theft, says UK Treasury

Cards will work...

BBC personal finance reporter Simon Gompertz tweets:

Greece: The system for paying with debit and credit cards for retail transactions continues to function, says UK Treasury

Osborne on Greece

More from the Chancellor, George Osborne, who has told MPs that most people regarded the referendum called by the Greek PM Alexis Tsipras for Sunday as a vote on whether Greece should remain in the eurozone. 

"This lunchtime as we just heard the Prime Minister chaired a meeting attended by the Governor of the Bank of England, myself, the Foreign Secretary and others to coordinate our response. Britain's attitude to the developing Greek crisis is clear - we hope for the best but we prepare for the worst."

Osborne: 'Standing by'

The Treasury and the Bank of England stand ready to ensure the stability of the UK economy in the event that Greece does leave the eurozone, Mr Osborne added. There are also contingency plans in place to help UK citizens in Greece "if the situation deteriorates".

Osborne: 'prepare for the worst'

Chancellor George Osborne has told MPs that he hopes for the best on the Greek crisis but is preparing for the worst. No one should underestimate the effect of a Greek exit from the euro on the European and UK economies, he adds.

Guidance for trading with Greece

The Department for Business and the Treasury have issued lengthy

guidance for UK businesses that trade with Greece following the introduction of capital controls. It warns: "Where countries have experienced disruption in the past, companies have experienced: delays on payments and deliveries; impacts on demand due to ongoing economic uncertainty."

'Juncker is right'

  Another reader, Tim Grover, emails:  

European markets slump

Europe's stock markets ended the day sharply lower as the crisis in Greece escalated. The DAX 30 in Frankfurt shed 3.6%, the CAC 40 in Paris fell 3.7%, while the FTSE 100 in London closed down almost 2% at 6,620. Bourses in Lisbon and Milan both fell more than 5%, while Madrid was off 4.6%.

'Accept their responsibilities'

Not much sympathy for Greece from some of our readers this afternoon. John Dyer writes: "I realise that most people were not responsible for the borrowing but how many paid their taxes in full? How many had a non-job with the Greek government? No, some Greeks simply need to grow-up and accept their responsibilities." Dave Thompson, in response to Joe Miller's earlier post, writes: "Dmitris [the Greek chap interviewed in the cafe] seems to speak for the sad majority of older Greeks - that to them, this is in no way a problem of Greek making; instead it's a conspiracy of richer Western countries to destabilise them. The Greeks must reap what they have sowed."

Sachs: 'Greece should default'

Jeffrey Sachs
Getty Images

Columbia University professor Jeffrey Sachs tells Bloomberg TV that Europe cannot force Greece to leave the euro because there is no formal mechanism to do so. He says Greece will now go into default, which he thinks is the right thing for the country to do: "Greece should default - and it should stay in the euro." Germany's refusal to allow debt reduction has resulted in a "full banking panic compounding the pain", however.

Obama and Hollande talks vow

Francois Hollande and Barack Obama said they will work together to help restart talks with Greece, according to an aide to the French president. The US president and Germany's Angela Merkel discussed Greece yesterday, while US Treasury secretary Jack Lew spoke with Greek PM Alexis Tsipras.

Wrong tune?

The BBC's Joe Miller reports from downtown Athens:

Latest in series of insensitive songs playing in Athens cafes: “Summertime, and the living is eaaaaaaaaasssssy”.

The price of pride

Celebrated bond trader Bill Gross of Janus Capital tweets: 

Gross: Pride and an ignorance of economics goeth before a fall. Reparations and austerity for Greece will cost the EU big-time.

'Not this Europe'

Dmitris
BBC

The BBC's Joe Miller reports from Athens: When Dmitris heard I was with the BBC, I thought he was going to wring my neck. But after launching into a series of invectives against David Cameron, the UK, and the richer European economies, he began to tell me about his life. Now in his late sixties, Dmitris had to close his stationery shop in February - after 43 years in business. His children are planning to leave Greece. "I want to stay in Europe," he says. "Just not this Europe."

Renzi's rationale

Further to his tweet, Italian PM Matteo Renzi is agreeing with EU Commission president Jean-Claude Juncker in saying that a no vote by Greek voters in Sunday's referendum would point to the country's departure from the euro.

'Euro vs dracma'

Italian PM Matteo Renzi tweets:

The point is: greek referendum won’t be a derby EU Commission vs Tsipras, but euro vs dracma. This is the choice.

'No panic'

Greek ATM
Getty Images

The BBC's Simon Gompertz reports that ABTA chairman, Noel Josephides, is near Mount Athos in Greece. He says "there doesn't seem to be any panic", with cash machines dispensing their €60 limits, while he has twice withdrawn €100. Asked whether businesses would reject cards because of worries they could have trouble prising the money out of their banks, Mr Josephides says hotels are accepting cards but one petrol station would only take cash. "This has always been a cash economy," he adds.