11th hour bailout request for Greece

Greece (MNN) — It took guts to do it…or extreme desperation. Hours before Greece was set to default on its debts, Greece asked the International Monetary Fund for its third European bailout in five years.

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.

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.”