Greece facing capital controls as default looms, analysts warn | Law

Greece facing capital controls as default looms, analysts warn

Professor Ross Buckley speaks to Elizabeth Jackson from ABC's AM (20 June 2015) about the possible outcomes for Greece's banks to come out of an emergency meeting of Eurozone leaders on Monday 22 June. 

"I think there's sort of three options, the way it might play out next Monday.

The first is: Greece refuses to agree to further reforms. European Central Bank doesn't release any further funding. Greece then defaults on the 30th June. There's a run on its banks. There's capital controls on the banks and it has to leave the Eurozone.

The second option is: the Greek government does agree to some more reforms and more austerity and then it gets the further money that it needs to keep on going. The third option is: it doesn't agree to any more reforms but everybody papers over it, so it stumbles on and Greece still does get the money.

And what Greece is doing is playing a game of brinksmanship. It's betting that the European Central Bank - and principally the Germans - will blink before it does.

So Greece is very worried about what it would look like if it had to leave the euro, but the European Central Bank is very worried what the euro would look like with the loss of confidence that would come if Greece pulls out. And nobody knows."

Click here to listen to the full interview.