(The New York Times) — The question of how to save Greece, debated for more than five years, is the European Union’s recurring nightmare. After the country’s citizens voted to reject the terms of a new bailout by international creditors, Greece is now veering closer to leaving the 19-nation eurozone and abandoning the shared euro currency, a move that could destabilize the region and reverberate around the globe.
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Prime Minister Alexis Tsipras of Greece has been formulating a new strategy for negotiating with creditors. Mr. Tsipras had argued that voting no in a referendum on Sunday to harsh austerity measures like pension cuts would strengthen the country’s bargaining power. He has banked on a theory that without a bailout, Greece’s departure from the eurozone would be too detrimental to Europe.
On Monday, Euclid Tsakalotos was sworn in as Greece’s new finance minister after Yanis Varoufakis, a central figure in rallying votes in the referendum, abruptly resigned. Mr. Tsakalotos had been tapped in April to help negotiate with Greece’s European creditors, in part to offset Mr. Varoufakis’s confrontational style.
The European Central Bank responded Monday to say it would continue to make 89 billion euros, or about $98.4 billion, in emergency loans available to Greek banks. It is enough to keep the banks from failing but not enough to prevent them from running out of cash that they can issue to depositors within a few days.