After more than half of the ballots cast at the Greek bailout referendum were numbered on Sunday night throughout the country, partial results see an overwhelming 61.3 percent of counted votes against the spending cuts and tax increases which were proposed by creditors as means of securing finance for the economically-troubled country in the event of lending a much-needed bailout, with only 38.7 percent being favorable to them.
This means that, barring a statistical miracle, the final result will be negative towards the proposed reforms, supporting the government’s position on the matter but possibly sending the country crashing out of the Eurozone.
Greek banks are nearly out of liquidity, being closed for the past weeks and allowing only a restricted number of cash withdrawals. The solution would be an emergency loan from the European Central Bank, but opinions on whether the institution will agree to it differ in light of the referendum’s result.
The Greek cabinet, headed by prime-minister Alexis Tsipras, considers that the vote allows Greece to negotiate loan terms from a better position than before. Tsipras was the one who called for the referendum more than week ago, after he rejected drastic tax increases and spending cuts which were proposed by the country’s financial partners in exchange for a crucial loan, which he deemed as “blackmail”.
Members of the government have also argued that the vote is not for Greece’s exit out of the Eurozone, but that it gives them the means to further negotiate a deal with creditors before the situation become unsalvageable.
Unfortunately for them, time is running out as Greek banks could all go bankrupt starting next week unless they manage to obtain some form of liquidity. This would make the country’s economy free fall towards a total crash and certainly result in it being the first country leaving the Eurozone, only 15 years after the euro began as a currency.
European officials have not commented on the negative outcome of the referendum. However, a string of meeting has been announced for the following days: German Chancellor Angela Merkel is due to meet French President Francois Hollande on Monday in Paris. The European Commission will also meet on Tuesday and is due present a report of the situation to the European Parliament. But the EU Council – the European Union’s co-legislative body, alongside the Parliament – has not scheduled any meeting of EU finance ministers until now.
Image Source: independent.ie
