This is about as good an update from Bloomberg as I have seen out there on Greece. It's in a Q&A format and covers the questions most of us would have. I have no idea what will happen in Greece. If the worst case scenario does happen, we will all need to monitor the situation for signs of contagion. If the debt gets rolled over again, nothing significant is likely to happen. It seems like we find out by the end of June or in July at the latest.
Below are a coupleof example Q&A's from the article to get a feel for it.
-----------------------------------------------------------------------------------Q: What will the IMF do?
A: A missed payment date starts the clock ticking. Two weeks after the initial due date and a cable from Washington urging immediate payment, the fund sends another cable stressing the “seriousness of the failure to meet obligations” and again urges prompt settlement. Two weeks after that, the managing director informs the Executive Board that an obligation is overdue. For Greece, that’s when the serious consequences kick in. These are known as cross-default and cross-acceleration.
Q: What are cross-default and cross-acceleration?
A: Failure to pay the IMF would entitle some of Greece’s other creditors, including the European bailout fund, to declare a default. They would then have the option to demand immediate repayment of all their loans, a process known as acceleration. Other lenders could then follow suit. While calling a default preserves creditors’ claims, acceleration -- the bit that hurts -- isn’t automatic. Each creditor decides on its own.
To varying degrees the debt is linked in a web of cross-default and cross-acceleration clauses that make it safe to assume that one default and acceleration would trigger demands for repayment on most, if not all, of the rest.
Here is later news update from Bloomberg
And we also have this from the UK Telegraph
US Secretary of the Treasury Warns Failure Could Spark a New Crisis
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