Graffiti in Athens (AFP/Louisa Gouliamaki)

Greece has just joined Sudan, Somalia, and Zimbabwe in the rogue's gallery of countries that are in default to the International Monetary Fund. Not only that, but it's the first rich country to ever do so after it missed its €1.5 billion payment on Tuesday.

As a practical matter, though, this isn't quite as bad as it sounds. That, more than anything else, tells you how serious the situation is in Greece right now: a debt default isn't even their biggest problem. So what is? Their banks. And the good news, insofar as there is any, is that this default shouldn't make things any worse for them. That's because the credit rating agencies technically won't even count this as a "default" since it's not on private investors. That, in turn, means the European Central Bank should still, if it wants, have the wiggle room to consider the Greek government solvent enough to keep guaranteeing the bonds its banks have. Why does that matter? Well, without that guarantee, the banks can't use those bonds as collateral for ECB-approved emergency loans, and without those emergency loans, they would collapse. So this default shouldn't make Greece's financial system disintegrate overnight, which is about all it can ask for at this point.

That's not to say that there will be no consequences. Just that they're negligible. Sure, Greece won't be able to get any more help from the IMF until or unless it pays them back. And this default does give the other euro zone countries the right to call in all the money Greece owes them at once. But Greece needs a bailout from Europe more than the IMF, and it's not like Europe is going to force it into another default while they're negotiating that. Besides, if Europe really wanted to force Greece out of the euro, it has other ways of doing so.

The story, in other words, hasn't changed. Greece is broke, and is trying to get a better deal than it's gotten before by threatening to default. Well, now that's not just a threat. So now the question is whether that will make Europe offer concessions that it wasn't willing to before. Don't bet on it. Europe rejected Greece's plea to extend its current bailout past its expiration today, and German Prime Minister Angela Merkel has said she won't consider Greece's offer for a new bailout until after the country's referendum on whether it wants to stay in the euro or not on Sunday. Greece's government, for its part, has suggested that it'd be willing to cancel the vote for the right deal, which makes it seem unlikely that it will happen at all. In other words, all this—the default, the referendum, the brinkmanship in general—has been a gambit to get something out of Greece's lenders, and it doesn't look like it's going to work. The only thing Europe has offered is to talk about restructuring Greece's debt in October if it goes along with austerity now.

But the real deadline here is July 20th. That's when Greece is supposed to pay the ECB €3.5 billion that if it defaulted on would almost certainly result in the ECB immediately pulling the plug on its banks. Of course, the ECB could pull the plug at any time between then and now since it has a good deal of discretion over how many emergency loans Greece's banks can get. It's capped those at €89 billion for now, which, with all the panic, is only enough to keep the banks from going out of business if they close their doors for business for a little while. But as long as Greece is trying to work out a deal with Europe, the ECB wouldn't do anything that could all but force them out of the euro. (If Greece's banks went bust, the only way its government could get the money they need would be to either take it from depositors or to print it—by leaving the euro and bringing back the drachma).

Defaulting on the IMF, in other words, was relative child's play. Defaulting on the ECB, though, would be something else entirely.