Greek Debt Crisis Spirals Toward Default

With guest host Jane Clayson.

Greece closes its banks as debt negotiations reach a crisis point. We hear the latest on the debt crisis and its threat to the Eurozone. Plus: Puerto Rico announces that it can't pay its debt, either.

Today is the day that Greece is supposed to pay up. One point six billion euros to the International Monetary Fund. But it doesn’t look like the check is on its way. Global financial markets taking a hit. US stocks reacting to a possible default. Greece’s banks remain closed. The Greek people still lining up at ATMs without cash. And waiting for a referendum could decide their fate in the Eurozone. “But if the Euro fails, Europe fails,” says Germany’s Chancellor Angela Merkel The global consequences are huge. The world is watching. This hour, On Point: Greece on the edge of default.
-- Jane Clayson

Matina Stevis, reporter for The Wall Street Journal. (@matinastevis)

Dimitra Kessenides, associate editor at Bloomberg Businessweek. (@dimitrakny)

Dimitri Vayanos, professor of finance and the head of the department of finance at the London School of Economics.

Erik Jones, professor and director of European and Eurasian Studies at the Johns Hopkins University School of Advanced International Studies. (@erik_jones_sais)

The Wall Street Journal: Greece to Default on $1.73 Billion IMF Payment -- "The Greek government’s decision to call a vote on measures its creditors demand in return for more bailout aid has cast the country into uncharted waters. As of Tuesday, Greece will be cut loose from international rescue loans for the first time in more than five years. It will also default on the €1.55 billion ($1.73 billion) IMF payment, whose deadline is the same day."

Bloomberg Businessweek: How Greece Can Fix Itself — "Greece has underperformed since 146 B.C.E., when Corinth—and eventually the rest of Hellas—fell to the Romans. It’s been in default on its sovereign debt for half the years since winning independence from the Ottoman Empire in 1832. Its economy is stultified by statism and corruption. But it remains blessed with breathtaking scenery, treasures of antiquity, and a creative, industrious people who have enjoyed great success—albeit more often outside Greece. Its potential is vast. If Greece can get its act together even a bit, this drama doesn’t have to end in tragedy."

Reuters: Greece imposes capital controls as crisis deepens — "Greece moved to check the growing strains on its crippled financial system on Sunday, closing its banks and imposing capital controls that brought the prospect of being forced out of the euro into plain sight. After bailout talks between the leftwing government and foreign lenders broke down at the weekend, the European Central Bank froze vital funding support to Greece's banks, leaving Athens with little choice but to shut down the system to keep the banks from collapsing."

Danica Coto, Caribbean based reporter and editor for the Associated Press. (@danicacoto)

Associated Press: Puerto Rico governor says island can't pay its public debt -- "The governor warned that Puerto Rico can't pay its $72 billion public debt as international economists released a critical report Monday on the island's economy. The news from Gov. Alejandro Garcia Padilla delivered another jolt to the recession-gripped U.S. island, as well as a world financial system already worrying over Greece's collapsing finances."