With few options left and a $1.7 billion loan payment due to the International Monetary Fund on Tuesday, Greek Prime Minister Alexis Tsipras is taking the bold step to call for a July 5 national referendum on the eurozone's latest bailout offer.
The move comes as Greeks race to withdraw money from banks for fear that Athens imposes capital controls, spurring talk that some financial institutions could stay closed on Monday. With negotiations with the country's creditors halted, Tsipras planned to hold a cabinet meeting tonight to discuss the crisis.
His gambit is aimed at shoring up Tsipras's left-wing political base, putting his domestic opponents on the spot and buying him a few precious days in hopes of thrashing out a deal with the country's creditors. On the line is 15.5 billion euros in aid Brussels refuses to release unless Greece makes further cuts to its pension system, including for the country's poorest retirees.
While here in the U.S. we celebrate our Independence Day with a shorter trading week, the world's oldest democracy remains in a pitched battle for self-determination. At issue is whether the citizens that call the birth place of democracy home are so in debt to outsiders that they have lost their sovereign right to shape their own destiny.
More broadly, the outcome of the bailout talks has potentially enormous implications for Europe's more six-decade experiment in political and economic integration, as well as for the global economy at large.
Peter Kenny, chief market strategist with trading firm Clearpool Group, says the risk of a Greek default casts a cloud of uncertainty over the long-term viability of the European Union.
"Greece's impact on global and U.S. markets remains undefined, though most analysts would agree that failure to reach an agreement on a deal will have a decidedly negative impact on near-term economic performance [and] interest rates, and lead to the potential for further erosion in the union," he said.
While German Chancellor Angela Merkel called Brussels's last bailout offer "extraordinarily generous," Tsipras described it to a national broadcast audience as a "humiliation" that would exact an "unbearable" toll on Greeks already battered by years of austerity.
According to The Economist, Greece, with a population of just 11 million, carries a debt load of $263 billion, or $23,000 per person. For now it is this debt overhang -- a by-product of corruption, epic tax evasion and multinational fiscal manipulation -- that is casting a shadow over Greece.
Greece's protracted economic crisis has resulted in a jobless rate of more than 25 percent, while more than half of its youngest workers remain unemployed. This month a University of Thessaly public health study pointed to a 35 percent rise in the country's suicide rate from 2003 through 2012, with researchers linking the spike to the economic downturn.
"We found a clear increase in suicides among persons of working age, coinciding with austerity measures. These findings corroborate concerns that increased suicide risk in Greece is a health hazard associated with austerity measures," the researchers concluded.
In January, on the eve of a watershed election, Tsipras inspired a beleaguered electorate by asking voters to give his Syriza Party a mandate for "self-reliance" that would restore "the sun of justice, and the sun of democracy, the sun of dignity."
Six months later, and with his country still mired in gloom, Tsipras is just hoping to preserve the belief for Greeks that tomorrow is another day.
America's missing youth
The release on Thursday of the U.S. Department of Labor's latest employment report is expected to show another solid month of job-creation, along with the kind of upward drift in wages required to propel consumer spending.
Six years after the end of the Great Recession, is it finally morning in America? Well, let's not throw the curtains open quite yet.
For evidence of how far the job market has to go before it is fully healed, it's useful to look at a recent report by the Federal Reserve Bank of St. Louis. The study compared the decline in the domestic labor force participation rate -- the percentage of working-age people who are either employed or looking for work -- with that in Canada, France, Germany, Japan, the United Kingdom and other developed countries from 1995 through 2013.
The analysis found was that, while youth participation in the labor force declined in all the surveyed countries, it fell furthest -- by far -- in the U.S., tumbling 11.2 percent over the period in question. The average decline across all eight countries was 3.5 percent, with only the U.K., at 7.9 percent, approaching America in the share of young people effectively shut out of the work force.
The recession is over, in short, but its roots remain burrowed deep in the economy.
Diminished opportunities for young people spell particular trouble for mature economies like the U.S. that are already concerned with funding our social obligations to hordes of retiring baby boomers. It also portends a tougher road ahead for younger workers. That's because delays in getting critical work experience tend to undermine lifetime earnings potential.
But what do such data points mean in real terms? To cite one example, the Community Service Society estimates that in New York City there are nearly 200,000 16-to-24-year-olds who are neither in school or in a job.
Lazar Treschan of the Community Service Society, one of the nation's oldest social service non-profits, says the employment crisis among the young must be addressed.
"Youth unemployment is at the highest rates it has been in decades, and that's because of the changing nature of the labor market," he said. "Older workers are staying in the economy longer and some people retire to lower skilled jobs that are a little bit easier for them. But those are jobs that would have been taken by younger people. At the same time, a lot of jobs that young people used to do don't exist anymore."
Window of opportunity
If the real economy that exists beneath the welter of government stats remains bogged down, the U.S. at least got a sense of closure last week with the Supreme Court's decisions affirming the Affordable Health Care Act and legalizing same-sex marriage.
The rulings contrast with the pervasive sense, regardless of political persuasion, that for years our nation's political process has been broken.
While these legal developments may seem unrelated to the marketplace, could they help bolster our national belief that Americans can finally find the common ground to build a broader prosperity?
If not, our nation's young people, in debt and searching for a foothold in an unforgiving economy, could find their futures -- like Greece -- out of their control.