Greece's D-Day

SUDDENLY Greece is about a lot more than Greece.

The lopsided Greek vote - 61 per cent to 39 per cent - to reject the last rescue package from the country's creditors has cast their impasse into a high-stakes drama over the future of Europe. Greece itself is teetering on the edge of economic collapse. Its banks are virtually insolvent, limiting depositors to meager daily withdrawals of 60 euros (S$90). European leaders have given Greece a five-day ultimatum (until Sunday) to reach agreement with lenders. If no agreement emerges, a chaotic situation will get worse. The government will exhaust its skimpy supply of euros and be forced to pay either in scrip (possibly including promises - not reliable - to convert the scrip into euros) or in a national currency, the drachma.

Just how much the new money - or monies - might be worth is an open question that would compound, at least initially, uncertainty and loss of confidence. As important would be the political fallout: the sense of betrayal that Greeks already feel towards the European Union for its failure to provide a safety net for a member country at a crucial moment. Among creditor countries (Germany, the Netherlands), the ill will is reciprocated. They blame the Greeks for their plight.