WASHINGTON (6/30/15)--The decision by Greece to temporarily close its financial institutions and stock market will not affect any Greek credit unions--for the simple fact that there are no credit unions in that country. However, Michael Edwards of the World Council of Credit Unions noted Monday that credit unions elsewhere in Europe could feel an impact.
If Greece defaults on its debt, or ceases its use of the Euro as currency and converts back to the drachma, credit unions in Euro-using countries may feel the strain, Edwards said Monday. That could include credit unions in countries such as the Republic of Ireland, the Netherlands, Estonia, Latvia, and Lithuania.
The decision to close up shop on banks and the stock market was made after the European Central Bank declined over the weekend to expand an emergency loan program that has been propping up Greek banks in recent weeks while the government tried to reach a new deal with international creditors.
The New York Timesquoted a banking official as saying the tentative plan was to keep Greek banks closed at least a week.
"Other European countries with credit union systems--including Poland, the United Kingdom, Romania and Macedonia--do not use the Euro and would therefore be more sheltered from economic volatility related to a 'Grexit' from the Euro," Edwards noted. Grexit is the headlines-grabbing word coined to describe a Greek exit from use of the Euro.
Edwards also said that the overall impact on European credit unions and banks if Greece defaults on its international debt would be less severe today than it would have been when the Greek financial crisis started six years ago.
"Many European financial institutions have spent the last six years backing away from Greece's economic problems and therefore have significantly reduced their exposure," he said.