>> rustic measures. greece is shuts its banks. they're trying to avert the collapse of the financial system. customers line up for the maximum withdrawal limits. >> markets react. the euro plunges did investors seek shelter in safer assets. the breakdown in greece talks with global markets. >> the voice of the people heard the prime minister elected puts the eu proposal for a debt deal to a vote. greece decides there future in the euro in a referendum next sunday. >> chinese stocks after an

interest rate cut over the weekend failed to stem the nation's biggest draft since 1996. -- drought since 1996. >> welcome to "countdown." i'm anna edwards. i'm in london. >> i'm guy johnson in athens. >> it warm welcome to the program. let's take a look at some of the examples of investors taking flight to safety in this morning trading session and let's start with a picture across the fx market. it dipped below 110 on the u.s. dollar. they're going to a safe haven like the yen. this is a picture of the euro something this morning.

asian market showing signs of stress as well. we'll get to that in a moment. a big day for greece and the eurozone. bloomberg correspondence are standing by. greeks react to capital control. the ecb freezes emergency cash. hans burkle -- hans nicols is in ireland. -- berlin. let's continue coverage of the big story. greece has shut its bank and oppose capital control to birth the collapse of the financial system and there the ecb froze the ceiling. guy johnson is in athens. what does the bank restrictions involved? and good morning to you. guy: good morning. they announced at 3 a.m. in the

dead of the night effectively where shutting down the greek economy today. this is a transaction free zone unless you are a tourist. greeks have been lining up to take their banks out of the atm. the max they could take out is 60 euros a day. that is the limit that is being imposed. the stock markets have closed. the bond market is effectively shut down. if euro companies are trying to run a business, this will make life very difficult. moving money in and out of the country now is effectively banned. it is a difficult situation for an economy that owes many. if you pass a credit card or eight tourist, you are exempt from the rule. that is on the assumption that there is money left in the atm.

as many of the atms here in athens over the weekend were absolutely cleared out. who is responsible for this? again it happened in the middle the night here and it is a european commission and the ecb that are responsible for this happening. >> the departments are secure. it going secure our salaries and pensions. any difficulties that must arise must be doubt with commonly and resolve. the calmer we deal with difficulties, the sooner we could overcome them. guy: he needs to hear from the great people. the referendum is coming up on sunday. it is critical to his plans. what will be the question that

will be asked? anna: a lot of focus on how ordinary greeks will manage make it through the week. what is the agenda or the rest of the week in athens? guy: the agenda of the week is flexible to put it mildly. the imf payment tomorrow is important. most people here don't expect a payment to be made. that will change the terms of engagement between greece and the imf. the terms of the relationship are very much stringent. we have the government spokesman taking place. we will get a lot of that -- questions i suspect about the referendum. what is happening with the banks? when do they open? they are closed for at least a week until after referendum. it is an all greek affair. it will be interesting to see if international press is there.

trying to get details on what is incredibly difficult situation at the moment. the question of what the greek people will be asked is very important to this day. the commission put out a note in greek laying out what it had effectively offered. a very busy week. thanks shut. transactions not -- banks shut. transactions not happening. they are in deep freeze. anna: the payment is due tomorrow. the date has been looming on calendars for months. what if it is not paid? guy: i think it will have a number of implications. the bond markets are closed. we will have long-term implications. we don't know if that will change clauses in other contracts of whether -- payments

that were due over a series of months or weeks suddenly becomes due at one point in time, there are all kinds of things that will happen. we simply don't know. we expect that payment not to be made. it is difficult to judge at this stage. the country is going to carry on, but it will carry on with a very subdued economic level. 60 euros a day. very difficult for people to exist on. effectively, the economy has been shut down. anna: i is in greece will offer free public transport in athens? that is according to a minister. thank you. the ecb was deliberating. how difficult was the decision for the ecb to freeze the lifeline of the great banking sector? >> extraordinarily difficult.

the ecb has taken the middle line cannot have a little greece -- in not giving greece more money -- the easy be has taken the middle line in not giving greece more money -- the ecb has taken the middle line in not giving greece more money. on one side, the ecb watches to see what happens. where does intensify behind the scenes particularly with the bank supervisor. medications have intensified. should the greek thanks miss is imf payment at the end of this month, some question -- they rely on state guarantee and assets and a good chunk of government debt. should those banks be declared

solvent things begin changing once again. there is a resolution mechanism. it is still at the national level. the supervisor is the bank of greece. it all gets very messy. anna: what does the ecb do next event? >> the ecb has got a lot of work on its hands. they have got to think about that. it has also got a fear. highly improbable. that window is still there. ito expect the ecb to take any pervert action in the next two days -- we don't expect the ecb to take any pervert action in the next two days. anna: thank you as we go through the program. to asia now. stocks mostly in the red due to

the collapse in greece aid talks. let's get to juliet who joins us from hong kong. juliet: we have just come back online wallowing in lunch break on the shanghai composite. the selloff is continuing. the amount is down by more than 5.5. it has been a volatile session in china. we said bit of a comeback. look like in my to be a positive day as investors reacted to that cut. we did start to see that the been. we are entering close to the market territory. we're also seeing quite a fair bit of weakness. it is still weighing on investors minds. the nikkei in japan at a two-month low down by almost 3%.

it is really impacting those mining stocks there. in hong kong, the market down by about 3.2%. there was a listing of a natural company holdings today. the top end of the ipo. it had a pretty good start on the day. it is being sold off a little bit. just looking at where a lot of that weakness is coming through in china, it really is a lot of technology stocks which have been doing incredibly well. they are all in the red a moment. we are seeing the technology sector and. there is a bit of money coming into his death banks by about 3%. we had seen some movement in the think of china earlier. unfortunately, much more volatility coming through.

anna: thank you. the are dealing with the great crisis -- they are dealing with a greek crisis. speaking of greece -- what do you think? we have heard many experts over the recent years, haven't we? he says 85% chance of a grexit. what day you think of the chances? join the conversation @ annaedwardsnews. great waking up to a -- greek waking up to a very different day. things are changing so quickly on the greek front. we will take a short break on "countdown."

greeks are lining up outside banks trying to get their cash it 60 euros max per day. people are queuing up to get money out of the greek banking system right now. you're looking at live pictures of athens. more on this when we come back. ♪

anna: welcome back. let's get you up to speed you'd this is the currency markets. the euro over three days against the dollar. we enter monday's trading day he'd waking up to capital control in the greek banking sector. this is what we are seeing in the foreign exchange markets. the yeah -- yen gaining.

trying to find those safe haven assets. let's take a look at asian markets. we are is a not just a reaction of what happened in china over the weekend, but contagion over the greek story playing out here. looks as if this week has started out on a very negative posting. msci down more than 2% at this stage at the trading day. anna: let's take a look at some stories you need to know. china has traded in a bear market. earlier, the shanghai composition -- composite index declining. tunisia has launched a nationwide manhunt for accomplices of the student who killed at least 38 people at a

resort hotel on friday. the interior ministry says he acted alone during the attack but had accomplices that supported him beforehand. his father and three roommates have been detained and questioned. anna: greece is taking drastic action as it moves closer to exit from the euro. things have been shut into least next monday. customers could only withdraw 60 euros a day from their account. the move follows that greece will hold a referendum on austerity measures amended by the crisis hit creditors. let's get more from our correspondents in brussels and berlin. jones you first. what are you hearing on the ground?

>> it is going to be a busy day here. we had under ready planned eu china summit. the president of the european commission will be over there. in between, he will be huddling with the commission and talking to other creditors about what to do after all of the dramatic developments over the weekend. he has planned a speech for midday. he will be talking this directly to the greek people and he will be trying to get institutions message across to the greek people. the commission started this yesterday. they put out a statement in both english and in greek about the positions about the proposal to greece in the negotiations. this is what it was before greece walked out on friday night before the referendum was called in athens. they are trying to get the

message out to the greek people to say, we are here. this is what is on the table so they know what will be voted on if it goes ahead. anna: thank you. stay with us. let's get to hans nichols. he is in berlin. what is the focus in berlin? hans: we're going to watch to see angela merkel explains this in the early afternoon. it seemed like the german government official approach was taking this step by step. use briefing reporters. he talked about what was next -- he was briefing reporters. he talked about what was next. he said a referendum won't solve this issue. germany is very much looking beyond the referendum. do you still need to provide support to the greek people? the humanitarian case. make sure the contagion is --

remember six months ago -- six weeks ago, excuse me -- greece is not that they get part of the eurozone economy. we could withstand that. yesterday when he was briefing reporters, he struck a similar note. this will be an acute pain, that was the word i believe he used. what happens to the contagion there is a bit of doubt. shoretel says he will do everything to fight this -- he says he will do everything to fight this. it could potentially work for greece. there is a way forward on this. i may be reading into much of this, but he is lacking the confidence that he had six week ago when he was a very clear that the contagion didn't exist. today he's talking about managing the contagion and managing what happens next. this briefing that he gave

reporters, he ended it with a shrug. anna: what are you hearing from other factions? hans: merkel will be addressing these factions 1:30 p.m. in berlin. it is clear shall have anger on the left side. the social democrat says help will continue for greece even if they vote the other way on the referendum. there's quite a bit of talk on humanitarian concern. anna: hans nichols in berlin. jones in brussels. let's take this conversation further in sense of where we go on greece. i'm joined why the codirector of open europe. and a cd electorate at a university -- and --

things have been moving so quickly, haven't they? let's start with you. what implications? we have to wait for the referendum to work out where this leads politics in greece? >> up until now, it was very clear. it was very popular. all of the opinion holes into the announcement of the referendum indicated that it went to a vote -- people are sick and tired of being ruled. anna: is there a chance that we salvage the second bailout? another creditor institution to get them through this period to the referendum? is there a chance that is salvaged? >> i think that is highly unlikely.

unless greece changes is position. at least the economy -- the system would be contained while the referendum takes place. the big question is what exactly is being voted on? if you do go back to the negotiating table, it is not clear whether they will be able to negotiate and have the same proposal that was there before. anna: is there really any point in asking a question about a bailout proposal that is perhaps no longer on the table? >> if that is what he really wants to not make the decisions

that would entail. let some steam off. i don't this is how people will see it though. i think the prevailing idea is that we are voting in favor against keeping the euro. long and complicated question about the proposal from the creditors. and with the reality of capital in place, that is what most people who were not trained in economics will believe it is. anna: we have spoken to -- there arm -- you knows there's massive contraction coming. what do you make of that? >> i think the rumors we are

hearing of 60 euros withdrawal -- it is much more stringent and we saw which is 300 euros and allowed some foreign transactions. there will be huge crunch in the economy you'd reis is a huge cash economy teared it will have a huge impact on businesses. i think it will be painful for the greek economy. what does a yes me? we don't know. what will they know mean? we don't know. i'm guessing it will be a yes vote. it is still not clear. >> it is important to know that tourists won't be affected. it is also important to note liquidity. pensions will be paid normally.

anna: think you very much. -- thank you very much. life pictures coming through of athens. we will be back there after the break. ♪

anna: welcome back to "countdown." let's have a look at how markets are shaping up. the greek stories having an impact on all asset classes. this is the picture of the euro-dollar this morning. we have seen the yen getting a bit of the boost as a result of nervousness around the greek story and developments there. we see treasuries getting a boost. investors are trying to seek out a safer haven for their assets. let's talk about what is happening in the asian equities session. we have seen the shanghai

composite index. it has come back again. it is now down 5.28 recep. -- 5.28%. they are calling what is happening in china a panic selling. the chinese central think is moving to move the policy generally over the weekend. chinese a 30's are clamping down on trading losing markets. that is the richer across the asian sessions -- picture across the asian sessions. anna: where the stories you need to know this morning.

a serious blow yesterday when one of the unmanned rockets exploded shortly after takeoff. the spacex falcon 9 in florida. aviation officials are investigating what went wrong. anna: the benchmark share index. they failed to stem the nation's biggest drought since 1996. the shanghai compass it index -- composite index declining. anna: greek has taken drastic actions to avert the collapse of its ranking system. banks have in check until at least next -- next monday. customers could only withdraw 60 euros a day from their account while payments a body -- abroad

have been banned. let's get more that story. nearly it -- elliott really tracking how people are dealing with the weekend developments. what has the feeling been like on the ground? elliott: if you have been living in a cave, it be completely oblivious in terms of what is happening in greece. i think everything is pretty much as normal. the bread guy is still selling his bread. as you say, people -- of this bank will remain shut as a greek bank the greeks will only be able to get $60 out per day.

tourists will not be restricted to that limit. they will be restricted to their normal limit. their only "countdown." adm -- there are only two atms at the airport the still had money in them. people were queuing up patiently -- very patiently i should say -- taking out card after card and taking out as much as they could on every single card. the guy behind me said, it is another day in paradise. anna: how will things unfold from here? what does the rest of the week look like? these controls are in for the rest of the week. elliott: they are. this is day one. if you think of your own situation or people at home or wherever they are, you could go a day or two. it goes beyond that, it could start to hurt.

it will start to hurt. people will be unable to make payments. he will get frustrated. think of how businesses will react. it might decide they don't want to take credit card payments in case it takes a few days for the money to come in. it will be tough on businesses. it will be tough on individuals. greeks don't realize how the week is going to pan out. this is uncharted territory. look at what happened in argentina at the turn-of-the-century. i was reporting in the aftermath of the crisis there. we saw violence. an unpleasant situation. we're not there yet in greece. the same time, i don't think they will fully appreciate the limitations being put upon them and the financials system and the impact it will have on greece as a whole. anna: thank you.

the surprise move is being celebrated by many that were pushing for an exit and nationalization of the country's key industries. here -- is are cheering the referendum. >> why not? ♪ >> everybody in greece that they are trying to mass the left government. it is not possible to have a good or bad agreement. the only road now is that people. say enough. stop with austerity now. it is the right choice.

i don't know what will happen. it is a new situation. i want to remind you that the banks of greece belong to the nation now. the new liberal direction -- they don't let us take them. why not? we must go to the fight with no fear. important sectors of energy and important sectors of industry. this is for sure. is a bigger problem for construction of the european union plan for the greek.

now after the crisis, 480 billion. we have a floor to stand and fight it we remain outside of the european union. anna: let's get out to guy who is in athens. guy? guy: thanks very much. implications of what is being announced overnight, the general secretary. good morning. nice to see you. this is an interesting situation. we have very few models for and very little understanding of to what would happen to what impact do you think the restrictions will have on the greek economy? >> it does not a good situation

for the economy. we hope it is a temporary phenomenon. what has happened could have an avoided. this was a totally avoidable situation. they did not have any other option. it would lead to 8 -- for the greek economy -- to a -- for the greek economy. guy: you are now looking at a series of potential outcomes here. we don't know what those

outcomes are. if you sit and try to figure out what happens next, plan a german in the eurozone it is that plan a? is there a plan b and c? >> we never intended to leave the eurozone. we believe that greece is part of the eurozone. it means that we will do our best to do so. there are red lines. the situation -- if we had followed their plan we have the looking for a long period of a

recession that this economy couldn't bear. guy: for the average greek person -- you have talked about the proposal that is being put forward. lecture you the greek people be thinking about this? -- what do you think the greek people should be thinking about this? >> give us the necessary fiscal space in order to bring back growth. not offer as a proposal that needs to be implemented. for this reason, the greek people should -- they should rethink.

guy: there is some confusion about exactly what institutions have offered. put out a note yesterday. it was published in greek. it look different to the basel may be put in front -- to the one that was put in front of the greek people. >> this is not the case. the greek government has an official proposal given by the institutions. it would be a slight changes. i don't think there is a big difference between the two. guy: how would another currency function? do you have the ability? they can't let see the greek people have not voted for this

proposal -- let's say the greek people have not voted for this proposal. >> it is never a good idea. guy: you must have a plan b in place. you are putting this in front of the greek people. they have the option. yes or no. let's say they vote no. you have to be prepared to make sure they have something that will allow banks to function. >> absolutely. if they vote no, that doesn't mean that we vote for a different currency. we have a very specific questions to the greek people whether to exit or not. we don't ask them whether they wish to stay with the euro union. these are not questions put to the people. some may vote with a thinking of

a different question. what we're saying is we are asking the to say yes or no to the proposals. otherwise, it could be a very unproductive comment to make about what would have happened if. we don't do that. guy: thank you very much indeed. the general secretary for fiscal policy of the greek government. two. -- back to you. anna: thank you. thank you for joining us. set out the story for greece. how concerned are you? >> we have been concerned for a very long time.

the expected this to happen. it would get to this point. fantastic politics. his trench present the idea that they could stay in the euro and have no austerity. he is trying to give a different choice to the elect are it. -- electorate. i think it we get a no vote then they will run policy themselves. anna: is that the overriding message that the great people will be looking to give here regardless of the question? >> i expect that is that people will be voting on. i think that does bring it home.

do want to be in the euro or not? anna: if you as an economist and looking for models of what is happening right now, the capital controls fellow to be quite severe -- where do you look? do you look to argentina? what we have seen many crises. i think we have all got a template. we agree that there will be economic contraction if we leave the euro. you have got an industry here.

it will be much bigger. anna: so it will be time for we see if there is a grexit. thank you. charlie stays with us a little bit longer. what do you think of the chances of a grexit? what chance do you put it at? find me on twitter. coming up more on how china's currency is changing the global market and opportunities it presents for international business. what opportunity is there for the international community to get involved in chinese currency trading? more on that when we come back. ♪

anna: welcome back. let's check in on some of the markets. this is the picture on the currency markets. the euro moving lower. investors looking for safer havens. the yen has moved higher. treasure markets have moved higher. investors look for safer havens. we show you what is happening in asia. greece must remain in the eurozone. the doors to open to greece negotiations. interesting comments coming in this morning. the european commissioner resented the most -- presented most recent plans they have been working on. seems to contrast with the most recent plan the greek government . plenty more developments coming through.

we show you the asian markets. the contingency we are seeing. the shanghai composite down 4%. it was done earlier in the trading day. we're getting comments from the regulators this morning. talking about margin trading. that has been a concern were regulators. they are saying margin trading is controllable. we saw the central bank in china moving -- trying to boost the economy in china. here are some of the stories you need to know. greece is taking drastic action to over the collapse of its banking sector there as it moves close to an exit from the euro. banks are shut until next monday and capital controls imposed. customers could which raw only's 60 euros a day -- could only which raw 60 euros a day -- withdraw 60 euros a day.

a nationwide manhunt for accomplices of a student who killed at least 38 people at a resort hotel on friday. the interior ministry says he acted alone during the attack, but had accomplices that supported him beforehand. his father and three roommates have been detained and questioned in the capital. anna: china's markets trading in bear market territory. the shanghai composite index is taking decline since it's peak in early june. anna: the china eu summit takes off. a lunch of a report of the impacts of china's currency on the global markets and scale of opportunity. for more, we're joined by a

policy chairman for his first interview to good to see you. thank you. the slowing of the economy more generally, what opportunities do you look to for china to present for london? >> china is a massive economy. its role in the financial markets is still not in line with its importance as a global economy. we are seeing cigna and changes in that respect. it is being used increasingly or transactions to deposits and for raising money. the western economies have got to a debt to that. the chinese authorities have got to change their way of doing things if they want their currency to be an international currency to the launching shanghai to be an international financial center. anna: you have evidence of how

much it is being accepted into global trading business circles rayna. >> russian companies are falling over themselves to start trading in chinese 20 rather than the dollar where the o's worry about geopolitical issues that my -- where as they worry about geopolitical issues. they're trying to stabilize that demand run china in its apply. anna: is there is concern for china meeting its growth target? is that just details? is it just distracting from the more long-term strategic story? >> it is a distraction from the more important issues. the use of chinese currency is still well below its importance in world trade. it has increased substantially.

there is still some way to go. both may be slowing. it is an economy growing rapidly. anna: we are about the possibility of a grexit. something that will be would to a vote in the years ahead. does the city of london corporation think about that? >> we are very involved in the debate the are many in london. they'll be looking at evidence for the debate. it is an important issue. it is getting the attention it deserves. there's going to be a lot of planning for it. a lot of evidence. anna: good to get your views this morning. mark boleat. charles stays with us. you're looking at live pictures

in greece. stay tuned. we are live from the greek capital. ♪

>> drastic measures. greece shuts its banks and stock exchange. customers line of at atms with a 60-euro maximum withdrawal limit. anna: the euro plunges an asian equities slump. the breakdown in greek talks foils goal -- global markets. guy: prime minister alexis tsipras puts the proposal for a debt deal to a vote. the greeks will decide their future in a referendum next sunday. anna: and chinese stocks trade

in bear territory. the nation's biggest stock route since 1996. a warm welcome to "countdown." i am anna edwards in london. guy: and i am guy johnson live from athens. anna: elliott gotten is with guy on the ground in athens. will greeks react to capital controls imposed early this morning? hans nichols is in berlin ahead of angela merkel's address to the german parliament later today. and joe is in brussels. jean-claude juncker is going to be speaking there later today. let's check in on what is happening on the markets.

we are already seeing reaction to the greek crisis. start with the foreign exchange markets. this is the selloff in the euro overnight. significant moves lower for the single currency, actually dipping below 1.10. back above that level now. as we look at the stock market reaction later, stocks 50 futures falling 7% at the market open. that is what the futures are suggesting we will see. stock markets look as though they will be much weaker in the european session. let's tell you what is happening on the asian equities session right now. investors digest not only contagion from the greek story, but what has been happening within china. we see the chinese central bank loosening policy over the weekend, trying to stimulate the economy. let's check out the bond markets. we are looking for any reaction in the bond yields.

-- bund yield. are we going to be -- to see spikes in italian, portuguese spanish yields? these are the yields we have right now. a little bit higher than we saw at the close on friday. we saw considerable contagion then. we will be measuring the level of contagion against those levels from 2012. hopefully those levels do not look similar. our twitter question of the day -- what are the chances now of a grexit? mohamed el-erian says there is an 80 -- 85% chance. let's get to our reporters now. we will start with guy who is on the ground in athens. you are looking at the big

picture on the ground in athens. you have a guest. guy: we do. let's get a sense of what will happen next on our next guest. good morning. nice to see you. mohamed el-erian thinks that we have an 85% chance that greece leaves the eurozone now it is that a reasonable assumption? >> if, next sunday, people decide to vote no the government may be forced to have elections in greece. on the contrary, if people decide yes, i think that we might have a new stage of negotiations between greece and -- not with the same government. probably with a new element, but we will have negotiations. guy: from an economic point of

view, can they carry on running greece the way they are running greece at the moment? this is a cash economy. you cannot do this for long. the clock is ticking. >> definitely. i hope that the creditors will start discussing with greece before sunday. if not, i think that greece will start to prepare a new stage for the economy for the greek state which will be the exit from the eurozone and the creation of a new currency. guy: do you think that is what syriza always wanted? are they ok with that? >> it was in the back of the mind of many syriza members and deputies. they have no debate on such an option. i think the government and prime minister tsipras will start

discussing this option. guy: how will the other parties deal with the situation? if we were to get a government of national unity, some coalition created beyond the current coalition, how would that affect what we're talking about? >> even having a coalition government without elections, we may have a kickstart to negotiations. they will be willing to accept any offer without any hand of negotiation. guy: do you think that would be something that people would be happy with? greece is a paradox at the moment. they want to stay in the euro but do not want to accept the terms. do the people vote for syriza and the current coalition? the political center of gravity in parliament may change behind you significantly.

it is very hard to get a gauge on whether or not the political class and the general population are on the same terms. >> the general population is pro-european. most of the government is pro-european. there is a the issue here that comes up. the government was elected to change economic conditions in greece, not to take further austerity measures. it was also elected to prepare a new growth plan for greece. i do not think the greeks would like to stay in the union. guy: are the greeks being asked the right question? should they be asked, do you want to stay in the euro or not stay in the euro?

>> for the moment, there is no discussion on that. neither the government nor the opposition are prepared to discuss such a big issue. guy: that is the question we are dealing with here. >> that is the mistake of both parties. there may be other ways back that greece will be forced to exit. guy: do you think there is a plan for a new currency? >> i am sure. i am sure there is a plan guy: how would greece change if that plan was to be put into action? how different a country would we be dealing with? there are geopolitical issues that are front and center. you go to the island on the far side of the island and they have a refugee crisis underway. this is a gay issue for people

in washington, berlin, and athens, for that matter. >> staying in the eurozone with no growth or deciding to exit the euro. it will be a shocker. it will be a new -- the beginning of a new era for greece. it will have its economy and its hands -- in its hands. in terms of foreign policy, the government, it can bring investments. guy: we better wrap this up. thank you for joining us. back over to you. anna: thanks so much. you can see the meal -- the market reaction. it continues to develop. german bunds, as we have shown

you on screen during that interview, surging at the open. falling to .72%. let's get to call in frankfurt -- paul in frankfurt. how difficult the decision was it by the ecb to freeze the assistance it provides to the banking sector in greece? paul: there is a large majority in favor of that decision, but it could not be an easy want to make the -- to make. we understand that they wanted more money. that tells you what everyone around the table probably knew that it was not going to be enough. the greek banks were not going to be able to open on monday. and so it proved. there is quite a lot of work behind the scenes to be done at the ecb.

the chief economist was supposed to be at a conference today. he has pulled out of that. the big concern now is how to react should there be contagion. anna: what does the ecb do next? how does the week shape up? paul: it has a couple of things on its plate. one is dealing with greece itself. the fsm will be in close contact with the greek banks the bank of greece. those talks have intensified over the last few days. we may get to the point, should greece miss its payment to the imf, where those banks have to be declared insolvent. the second is this issue of contagion. if bond yields spike yields in the market are definitely the prime concern. should they rise too far, too fast the ecb has pledged it is ready to react if needed and use all instruments within its

mandate. let's wait and see what this means. anna: we heard over the weekend that they were monitoring. thank you. paul gordon in frankfurt. 12 minutes past 7:00 in london. let's get the final thought from our guest over the last hour. pierre moscovici saying that the greek referendum is a democratic moment that has to be respected. a lot of things we do not know about the referendum that is going to take place. >> one of the things we do not know if -- is if it is allowed to take place. fiscal questions are not allowed to be put to referendum for the greek people. even if we get through this and the greeks vote yes, this is only about this year's bailout package, not next years. we could be doing all of this again in six months. anna: could there be

conversations to try to reopen negotiations between the creditor institutions and greece? on one hand, europe is focusing on contain the fallout from we can developments. on the other, are you hopeful that they will reopen those lines of dialogue? >> the americans are very keen and worried that what could happen here is unexpected fallout. something along the lines of a piece that we put out this year saying that the s&p could fall to 1100 p led by something like grexit or problems in china. anna: we are expecting the euro stoxx 50 to fall by 5% is money. the ftse down by possibly 2%. the cac down by 5%. this is what the futures suggest right now. that kind of reaction in global equity markets. >> there was a lot of

expectation that merkel would do the deal on friday night. i think they did not promise austerity to the greek people. now they have to deliver it. he needs the greek people to say yes. anna: good to get your thoughts on this ever-developing story. charlie joining us. we will take a short break here on "countdown." as german businesses grapple with the situation in greece, we will bring you an extensive interview with merck's ceo visiting israel right now. ♪

anna: welcome back to "countdown ." 7:17 here in london. let's check in on what is happening in the bond markets. looking for evidence of how nervous investors are about this greek story. this is what we are seeing in

bond markets. we are showing you the increase in the yields that we are seeing. that is the percentage change in the yields. do not before by that. the actual yield is 2.44% if you are looking at the spanish 10-year government bonds and 2.48% if you are looking at the italian. we are seeing a substantial move higher in bond yields. just to give you some context if you look at what happened in 2012, we saw the italian bond yields going north of 7%. you compare that to 2.45%, where we are right now, and perhaps one illustration of how investors are not quite as nervous today as they were about contagion around the eurozone or these kinds of events. a lot of infrastructure has been put in place and's those crises in 2011-2012. that is the picture across these bond markets right now. this is the spread of the

spanish 10-year over the german bund. another clear illustration of where we are seeing some slight safety. we are seeing safety among investors. you can see the gap between the spanish 10-year widening a little bit above the german bund yield. let's have a look at what we are seeing coming through on the equity markets right now. the euro stoxx 50 showing down 4.9%. we are expecting to see weakness at the start of european equity trade. we will be considerably weaker across the european session. the dax might be down 4.5%. things were very different on friday. there was some expectation that we would see some sort of deal. that fell away during the weekend. here are the top stories that you need to be aware of this morning he greece has taken drastic action to of her collapse of its banking system. banks have been shut until at

least next monday and capital controls have been imposed. customers can only withdraw 60 euros a day from their account while payments and transfers abroad have been banned. it follows the news that greece will hold a referendum on austerity measures demanded by the crisis. tunisia has announced the manhunt for the students who killed at least 35 people at the resort hotel on friday. the interior ministry says he acted alone during the attack but had accomplices who supported him before hand. his father and remakes have been detained in the p china's benchmark share index trading in a bear market as the interest rate fails to stem the nation's biggest route since 1996. the shanghai composition index -- composite index tumbled.

now let's have a slightly different conversation. tel aviv plays host to the germany-israel innovation conference as german businesses prepare to grapple with the situation in greece. the ceo of the global pharmaceuticals and chemicals company based in germany that is merck. he joins us live for a conversation from the tel aviv stock exchange. thank you for joining us. i wonder if we might start with an overall context-setting question. we are talking a lot about grexit, the possibility of greece leaving the eurozone. as a big german business how will you and others in the german business seen a pair yourself or what could be the fallout of this greek crisis? >> maybe i am contradicting the story of the day, but i am in israel to talk about the state

of the long-term future, which is innovation. building the company's future for the long-term. i am much less concerned as far as greece is concerned. i have been wondering throughout the last month how much time europe is spending on the greece issue. for me, it is something which now creates some turbulence. europe will go on. it is nothing which is on my mind for the long-term. it is nothing which is worrying me to the extent financial markets are at the moment. anna: m&a is on your mind, doing deals. tell me how that takes you to israel. >> as i told you, the background noise is tremendous. it might be that i am answering slightly besides your point. please do not hesitate to ask again.

but what we are doing in israel is a lot of alliances, research corporations and building for the life science business, for the pharmaceutical business, a sustainable, long-term business. we have a german-israeli innovation day today. anna: what kind of m&a opportunities do you see? how many deals are you looking to do? >> actually, we are announcing today to people, to acquire 100% of a company which is dealing with quantum rods and is helping us to extend and further build our leading position in the liquid crystals business which

is the flat display, where we are world market leader. secondly, we are in the process of taking over another company with a huge presence in israel. our israeli presence will more than triple by these two acquisitions. anna: do you see consolidation in the pharmaceutical sector? is that something that will continue? are we going to see more takeovers and mergers in pharmaceuticals? >> the answer is yes but not necessarily from our side. from our perspective, size is not everything that matters. the quality of the corporation breaching the gap between small biotech entrepreneurial, and across between from a singles. you do not need to be one of the big pharma guys to do that.

we can do it without major acquisitions and mergers in the next few years. anna: thank you very much for joining us. thank you very much for joining us. >> thank you anna. anna: over 24 minutes past 7:00 in london. let's get back to our top story. greece in crisis. our correspondent is danny buy in brussels and berlin. what are you hearing on the ground in brussels? >> the european officials in brussels are trying to contain the situation and make sure that there is no contagion. european commission president juncker will be trying to make sure that everything is as calm as possible. they are going to be trying to do their best. i am sure they are huddling behind the scenes, trying to make sure the fallout is limited. we just had a statement from the commission and they said that

the capital controls that greece has imposed are justified at this time. at the same time, they want them to be lifted as soon as possible. anna: hans, interesting that we are seeing the french finance ministry spokesman making comments. greece could leave the eurozone. it is a possibility, he says. hans: that is important because he along with pierre moscovici have been among the most positive on a potential to keep greece in the eurozone. the fact that he is saying that a grexit is now a possibility gives you an indication of just how far things have shifted in the last 48 hours. over the weekend, the german government started to make preparations. they clearly are concerned about contagion. a are saying that they need to make preparations. they also think that it can be -- that is the line angela

merkel will be addressing members of the opposite party about later today. then she will be addressing her own party conference for her first comments on greece. anna: thank you. back in two minutes. ♪

♪ ♪ ♪ get excited for the 1989 world tour with exclusive behind the scenes footage all of taylor swift's music videos interviews, and more. xfinity is the destination for all things taylor swift.

anna: welcome back to "countdown " this monday morning. we are factoring in what is happening with the greek story. this is the picture across the bond markets right now. looking for any signs of nervousness around other peripheral bond markets. the greek banking sector remaining closed this week. the 10-year spanish bonds currently yielding 2.35%. it was 2.11% on friday. it has moved higher. the italian bonds at 2.39%. it was 2.15% on friday.

that, again, moving higher. a similar story if we look at portugal as well. we are seeing a move higher. just to contact july that -- to contextualize that, nothing that -- nothing like what we saw in 2011-2012. that context needs to be borne in mind from previous episodes if you like. maybe in the last miniseries. info coming through from various participants. saying a greek exit for the euro is a possibility. not necessarily an expectation but a possibility. you can see the move we have in the spanish bond market and the difference between the spanish yields and the german yield. the gap between the two widening this morning, as it you would expect on a day when we are seeing, in many asset classes, investors trying to find what they perceive as safer assets.

investors netting into treasuries and some of the other bond markets as opposed to equity markets. it seems that the equity market session here in europe could be a tough one. the futures suggest we will be weaker across the european equity market. i can tell you the cac is down 4.5% a futures right now. the asian session has been a bit of a roller coaster ride as well. let's look at some of the top stories we are following this morning. elon musk's aim to transport astronauts to commercial -- with commercial spacecraft was dealt a blow when a craft blew up just 139 seconds into its mission to resupply the international space station. spacex and faa officials are investigating what went wrong. greece has taken drastic action

to avert the collapse of its banking system as it moves closer to an exit from the euro. capital controls have been imposed. customers can only withdraw 60 euros a day from their account while payments and transfers abroad have been banned. the move followed the shock announcement that greece will hold a referendum on austerity measures demanded by the crisis. that referendum is set to take place next weekend. let's get more from the streets in athens. elliott, you are hearing from greeks themselves about how they plan to cope with the restrictions being put on their daily lives in the week ahead. what is the feeling on the ground? elliott: this is the beating heart of central athens. buses and cars driving around the square with their usual reckless abandon. it all seems incredibly normal. the bread guy is selling his bread as normal. there is the bank.

the shutters are down. that is the scene you will see across greece today. greeks only allowed to take out 60 euros per person. the bank will be closed at least until the end of the week. it will be particularly tough for pensioners. we take the pulse of the greeks on the street, if you like. a business consultant. what is your sense -- how do you deal with these capital controls? >> first, i think a significant number of green people are very angry with the european union and what the eurogroup has done. they do not understand that with the austerity policy they have been imposing on us, people in greece are so impoverished. we have 60 euros per day. elliott: personally, how does it impact you? does it worry you? >> i am a business consultant.

my salary is above average. it annoys me. it does not worried me. put your money where your mouth is. i transferred friday a significant amount of my savings from london to greece. elliott: you move your money to greece. >> yes. i want to make a stand. elliott: you will vote no in the referendum. >> yes. they have to understand the pride of the nation. money is not everything. when you have people living on 600 euros, that is 10 days on the capital control. they think a significant amount of people are afraid of this bank insolvency. the european central bank and the regulatory authority should be really concerned now. elliott: thank you very much. wish you the best of luck. we are not the only ones here in terms of journalists. look across here. we have cameras, satellites from

the world media. crawling with journalists to try to get a sense of how greeks are taking these capital controls. really uncharted territory for this country. today is just day one of these capital controls. anna: a lot of international media and passion on the street in athens as well. thank you very much for that. let's get back to the market then. it has been a roller coaster ride or the asian equities session. we have seen a strong move coming through not just in reaction to the greek conversation, but what the central bank in china did over the weekend. let's get more details from asia. as we look ahead to our your -- european equities session, it looks as though we will see some significant losses. what has the asian session told us western -- told us? >> we are seeing volatility

continue in asia. if you have a quick look at the shanghai composite, down by about 2.2% today. it had a range of around 10% over the course of the day. we have also had some very strong ties on the shanghai copper is it -- the shanghai composite. that volatility continuing. currently down by about 3.2%. elsewhere in asia, quite a lot of selling going on. the nikkei in japan closed lower by almost 3%. that is its biggest fall since january. the market down by more than 2%. it posted its biggest fall since may. certainly a lot of selling coming through on the asian market. hong kong down today. where we are seeing games some energy players and some of the banks looking quite good.

a lot of the technology stocks are in the red. anna: thank you. juliette joining us from hong kong. 22 minutes to go until european equity markets open up this morning. we talked about what is happening in europe. things looking weaker for european equities this morning. we heard from mohamed el-erian on the possibility of a grexit. let's listen to what he had to say. >> if you were to put a gun to my head and say give me a probability right now that greece is in the eurozone in the next few weeks, i would tell you it is about 15%. 85% probability that greece will be forced to leave the eurozone. not because it wants to do so, but because it is no longer able to stay in the eurozone. anna: mohamed el-erian there.

let's put these moves into context as we show you what is happening in the future, where we might open up in equity markets and the bond markets. jonathan stubbs joins us now from citi. it was your economist, i think, who coined the phrase grexit. he is now saying that greece will stay in the euro despite what we have seen over the weekend. >> our economists first talked about the grexit a few years ago. the best case is that we get a yes vote as an outcome from the referendum. the probability of a no vote or a scenario that leaves us down to an outcome where greece is no longer in the euro area cannot

be discounted. it is also reasonably likely. it is as hard as we are seeing the volatility and reaction in the markets, hard to have a high degree of certainty right now. anna: we have been keeping an eye on peripheral bond yields. the french economy minister has been talking, saying there is still a chance for talks with greece before the deadline saying that the situation is very different in spain compared to the situation in greece. certainly, the yields that we are seeing on the peripheral bond products are nothing like they were in 2012, the last time we really were concerned about greece exiting the euro. >> there are two main stories. one is what is happening in greece, which is unfortunate on a personal level for many people and difficult for the country. financial markets, obviously contagion is the key thing that markets are worried about. we have seen the full reasons why contagion should be limited

compared to what it would have been two or three years ago. first of all, we have the policy response from the ecb. we have various measures in place, whether it is lt aro's, qe adoptions of programs that the ecb can be a part of that gives us an important liquidity backstop. the peripheral economies in europe are on a recovery path. current account deficits are now surpluses. you have seen improvements in the labor markets. they are more competitive. third the bank sector is no longer running capital deficits. they are now running capital surpluses. over the broader euro area remember that we are in the process of going through a progressively improving economic outlook. contagion risk is what market fear. there is going to be a lot of

uncertainty over the next few days and couple of weeks. ultimately, that contagion risk as proved to be more contained. anna: do you see a bigger role for the ecb in doing more quantitative easing or exercising the monetary transactions? the program that they saw general approval for from the european court of justice in the middle of june. do you see them exercising other options or a greater role for the stability mechanism that europe has western -- has? >> the keyword is options. the ecb has the flexibility. it has the mandate to use these options and it has a mandate to defend. should the market move as a consequence of events that are happening on the ground it threatens the ecb's main mandate, then it is likely we see additional moves from the ecb. it has not paid investors in the last five or six years to go

head-to-head with central banks. central banks and the ecb still have significant options. anna: thank you so much. stay with us. jonathan stubbs with us a little bit longer this morning. commentary from various participants as we go through the morning. we will bring all of that to you. the spanish government saying that they are sure greece will stay in the euro. thoughts and comments coming thick and fast from all of the players in this drama. the next installment of the drama, no doubt, the opening of the european equity markets. we will ring you that in just 17 minutes. we'll live in athens, where banks are closed today. stay with "countdown." ♪

anna: welcome back to "countdown ."

7:46 this monday morning in london. let's take a look at how the markets are falling right now. although the news over the weekend, the capital controls and temporary hosing of the banking system in athens this is the picture across the bond market. the 10-year spanish bond yielding 2.29%. we have seen a spike higher in these peripheral bond yields. coming back a little bit in the last hour or so. mark is trying to work out just how nervous they are. just how nervous are investors about contagion from the greek story into other parts of the eurozone? let's talk about what the equity market session might look like. this is a picture across the futures. we are looking for a pullback at the start of equity trading. looks like about 4% on the euro stoxx. the ftse will be down by 2.3%. those numbers look slightly scary half an hour ago.

things moving around this morning. investors trying to work out how to nervous they are about what is happening on the ground in greece. to an extent, they are pricing in grexit. this is what we are seeing at the moment in terms of those futures. let's get you up-to-date with some of the stories that you need to know today. china's benchmark share index is trading in bear market territory as interest rate cuts over the weekend failed to stem the nation's biggest crow -- rout since 1996. declines since its peak on june 12 two more than 20%. tunisia has launched a nationwide manhunt for a compass is of a student who killed at least 34 people at a resort hotel on friday. he acted alone during the attack but had accomplices that supported him before him. his father and three roommates have already been detained. greece has taken drastic action

to avert the collapse of its banking system as it moves closer to an exit from the euro. banks have been shut until at least next monday and capital controls have been imposed. customers can only withdraw 60 euros a day from their account while payments and transfers abroad have been banned. the move follows the shock announcement later -- late on friday that greece will hold a referendum on austerity measures demanded by the crisis. let's get more with jonathan stubbs, who joins us from citi. what we are seeing, futures suggesting we will see a pullback in equity markets. in peripheral bond markets, a spike higher in peripheral bond yields, yet nothing like what we saw in 2012. what does that tell us about what the markets are pricing in? this is not as bad as things could get if there were to be a grexit, is it? >> last week, we saw some big moves at the start of the week

to suggest mark -- markets are not fully pricing in either scenario. going back to 2011, 2012, the height of the sovereign debt crisis, you had peripheral spreads of 500 basis points. this morning, they are 250. that suggests a lot less risk within europe from a systemic basis today than there was three or four years ago. obviously, time will tell in terms of what happens, what the greek people decide. as a consequence of that, whether we need additional support from the ecb. that would be the key to how this plays out. we would see that as an opportunity for longer-term investors to pick up an asset class that we think is fundamentally attractive. anna: the greek stock exchange, we knew that was not going to open. confirmation of that today. the greek stock market is not going to trade today.

in china, a fall not just because of the greek thing but they will consider suspending ipos amid the market slump. we have the central bank moving to loosen policy. at the same time, regulators are trying to clamp down on the trading being driven by margin lending on borrowed money, essentially. how do you view china at the moment? >> a lot of what is happening around the world, we talk about investor liquidity as well as central-bank actions. if you go back over the last few years, the financial crisis. the world is being dominated by liquidity actions. from an equity market perspective, aligning with central banks, providing that liquidity, or aligning with bottom-up qe, companies buying their own shares.

we will see volatility along the way. we still investors do well by aligning with liquidity preferably by also owning these fundamentals. anna: thank you very much. we will see which hand the ecb decides to play. let's get more from our correspondents on the ground. we have the greek story covered from all angles this morning. guy johnson is on the ground in athens. hans nichols is standing by with a view from germany as well. let's come to you first. how are the germans going to manage a potential greek exit from the euro? our plans being made where you are? hans: it is step-by-step according to wolfgang schauble. but we are hearing across the eurozone is what happens beyond the vote. they are expecting rebuilders to vote for the referendum, which is to say they will vote for the package on the table. they want to stress that the

deal they can start renegotiating any time this is from the economy minister in spain. we also heard from the finance minister in france. it is the idea of what happens beyond the vote on sunday. can you restart negotiations? we just heard that debt structuring -- restructuring was on the table. clearly an effort to coax greek voters into supporting the offer that is on the table this 15 billion offer. if they do, then you have to have some sort of path forward on how you get that through parliament how you get negotiations restarted in brussels. anna: let's get to guy. you are on the ground. the capital controls, the restrictions on the sector, what do they look like? guy: they look like shutters.

shutters down across the front of every bank. some of them covering atms. most of the atms are the focus of the attention because some of them do not have money in them. some of them do. the greek people are only allowed to take out 60 euros per day. that does not apply to tourists or anybody with a foreign-issued credit card. the wealthy greeks still have access to capital as well because they probably have foreign bank accounts. heavy restrictions put in place. the stock market is shut. it is effectively an economy absolutely in a deep freeze. anna: thank you very much. just minutes until the start of european equity trades. let's bring in jon ferro. he is going to be here with "on the move." looks as if it will be a tough one. jon: an ugly open for the equity markets session. you can contextualize this.

quite clearly, it is not 2012. for me, you look at the spread, it has doubled since march. in the left lower months, we are seeing spreads float out. the question you have got to ask -- at what point does the ecb look at this and asked the question, we have got to do more? anna: trying to draw a firm line between the greek situation and others. we will wait to hear from other governments as we go through the day. jon will be up with "on the move " in a few minutes time. stay with us on bloomberg. ♪

jon: good morning and welcome to "on the move." moments away from the start of european trading. what a weekend that was and what a morning already. greece shuts its bank and stock exchange with the collapse of its financial system. the country stumbles toward default. markets react, the euro dives asian stocks drop and german bonds rally. china is poised to enter a bear market. the fourth rate cut since november. the shanghai composite struggles to shake off in a store losing streak.

check out futures markets ahead of the open. ftse 100 futures down by 150 points. dax futures up by 525 points. dax futures up by over 4% to the bond market opening about an hour ago. german bonds are higher, yields go lower. down by 15 basis points with spreads blowing out. we come back just a little bit but look at this for direction. italian yield up by 23 basis points. the yield, the gap, the spread the difference. we have doubled since then. risk aversion and contagion. it is not what the 12th but the move has been pretty severe this morning.