Things are suddenly looking a lot more interesting, and not necessarily in a good way. The long-simmering showdown between Greece and the Eurozone came to a head last week as negotiations between the two parties broke down and tensions rose to a breaking point. The Greek government essentially shut down the national banking system, freezing assets and only allowing small cash withdrawals. These measures were intended to prevent what had been shaping up as a Depression-style run on the banks as desperate Greeks tried to withdraw their euros before they got converted back into nearly worthless drachmas, a possibility that suddenly looked more likely than it had just a week or two ago.

Meanwhile, the markets, which do not like uncertainty, reacted strongly to all the turmoil with big sell-offs in equities markets on Wall Street and around the globe. The Dow Jones fell almost 350 points on Monday, June 29 as it became apparent that the two sides were headed for divorce and that a sovereign debt default seemed unavoidable.

And that was just Monday! The week continued in similar fashion. Greece did indeed fail to pay a $1.6 billion euro ($1.8 billion dollar) installment to the International Monetary Fund (IMF) that was due on Tuesday; it also announced that a national referendum would be held to determine if the Greeks would accept Europe’s distasteful offer to remain in the Eurozone. The referendum itself was seen as a ploy on the part of the Greek government to push off responsibility for negotiations on the voters and away from the government. It also complicated negotiations, particularly given that the referendum was scheduled for Sunday, July 5, several days after the IMF payment was due, and missed.

Despite the drama and increasing hostility between the two sides, it is still not inevitable that Greece will exit the Eurozone. A “yes” vote in Sunday’s referendum would give the government cover to accept a compromise that they have strongly resisted until now. But a “no” vote would be widely seen as Greece’s acquiescence to a complete economic dissolution with Europe. Polls indicate that public opinion is divided. As much as many Greeks feel mistreated and misunderstood by their European partners, many do not want to leave the economic union. In any event, it is certainly true that all eyes will be on Greece this Sunday. The results will be momentous, whatever the outcome.

Greece was not the only interesting bit of news this week. Another jobs report was released, and once again, the US economy is showing continued growth. The economy added 223,000 new jobs in June, close to analysts’ expectations. The unemployment rate also fell from 5.5% to 5.3%. This news, which most people would view as positive, was viewed less favorably by the markets. Investors took the jobs report as another sign that a rate increase is coming. The Dow Jones closed at 17,730 on Thursday, July 2, ending the week a day early for the 4th of July holiday almost 500 points lower than it had been not much more than a week before.

The Greek situation will bear watching closely in the days ahead, but the consequences of a Grexit is still probably not a serious today as it would have been two or three years ago. And rate increases will only come if the economy is strong enough to tolerate them – like a dose of castor oil, something we will all find distasteful, but know is going to make us stronger in the long run!