"What began as a debt crisis in Greece in late 2009 has evolved into a political crisis that many analysts believe could represent the most significant setback in over 60 years of European integration. Since 2009, Greece, its fellow European Union (EU) members, and the International Monetary Fund (IMF) have taken unprecedented steps in an effort to prevent a Greek default and ensure that Greece remains a member of the EU's 19member common currency area, the Eurozone. Officials have argued that a default and possible exit from the euro could have disastrous economic consequences for Greece, have negative repercussions for the broader European and global economies, and present a major challenge to European institutions. Key European leaders have consistently reiterated German Chancellor Angela Merkel's conviction that 'if the euro fails, Europe fails,' reflecting their belief that possible 'Grexit' from the Eurozone, the EU's flagship project, could seriously undermine the integrity of the Eurozone and even the EU itself. Nonetheless, a series of events in late June/early July have led analysts to declare that a possible 'Grexit' from the Eurozone is increasingly likely. On June 30, Athens failed to make a scheduled $1.7 billion payment to the IMF. Greek banks have been closed since June 29 and are not expected to reopen until at least July 9. In a July 5 referendum, Greeks voted to support a government negotiating position that Greece's creditors have rejected repeatedly."
CRS Insight, IN10303