By Tuvya Lieberman

Is it time to start saying Kaddish for European monetary union?

Leaders of the European Union pointed out recently that the current crisis in Greece has brought about “the most critical” moment in the EU’s 64-year history. They warned Tuesday night that they had five days to prevent Greece from entering into a full blown humanitarian crisis.

Greece is set to default on a €4.2 billion payment to the European Central Bank in twelve days. The International Monetary Fund (the IMF), the European Commission, and the European Central Bank are the three players concerned. They are known as” the Troika”, and if they refuse to bail out Greece again, it will default on its debts. This will likely lead to its eventual exit from the euro and perhaps even the European Union.

On Tuesday night Greece’s new finance minister, Euclid Tsakalotos, arrived empty-handed in Brussels following Greece’s “No” vote against the bail-out conditions suggested by creditors. As a consequence, talks with Greece and the EU ended without an agreement.
“Our inability to find agreement may lead to the bankruptcy of Greece and the insolvency of its banking system,” explained Donald Tusk, head of the European Council. “Without a deal, leaders were prepared for a “black scenario.” Mr. Tusk further explained that contingency plans to deal with a humanitarian crisis in the country were underway.

The Troika has been demanding that Greece carry out more painful reforms before getting another extension. Yet Greece’s Prime Minister Alexis Tsipras’s left-wing Syriza Party was elected on the very platform of rejecting any such reform.

So what’s next? Greek Prime Minister Alexis Tsipras is submitting a request for short term bridge loans and a new two-year rescue package from creditors. Euro monetary speculators remarked that it is likely that the bridge loans will be granted.

On Tuesday night, President Obama spoke with Mr. Tsipras and German Chancellor Merkel of Germany before leaders gathered in Brussels. He said, “It is in everyone’s interest to reach a durable agreement that will allow Greece to resume reforms, return to growth, and achieve debt sustainability within the Eurozone,” according to a statement released by the White House.

This is certainly the greatest crisis in the monetary union since its development fifteen years ago. However, U.S. involvement may help keep Greece in the Euro and help stabilize the market. So while it may not be time for Kaddish – Tehillim for European monetary union may still be in order.