Greek debt crisis: The referendum and what each outcome might meanComments Off on Greek debt crisis: The referendum and what each outcome might mean
The Greek people are being asked whether they want to accept or reject potentially painful reforms required by the indebted nation’s creditors – the European Union, the European Central Bank and the International Monetary Fund – in exchange for a fresh rescue package that could keep the country afloat.
They will have 12 hours – 7am to 7pm – to give their yes or no response and a winner could be announced as early as midnight.
One of the latest polls gave the ‘Yes’ camp – those in favour of a reform-for-aid package – a slight lead, while another gave a marginal lead to those against.
With the result far from certain, here’s a look at what could happen in each scenario:
If the Greeks vote ‘Yes’:
A yes vote would reopen negotiations with creditors and pave the way for a potential third bailout package.
However, there may be one large obstacle to overcome first – political uncertainty in Greece.
The Syriza party, which stormed to power in January’s elections, has pledged to end the punishing period of austerity that Greece has experienced in recent years.
If its people reject that mission, its unlikely that the party will remain as it is today.
The finance minister Yanis Varoufakis for one has hinted that he will resign should the ‘yes’ camp emerge victorious.
He told Bloomberg TV that the government would find a way of signing a new bailout deal if the Greek people wanted that, but “we might change the configurations of government as some people won’t be able to stomach it”.
If the Greeks vote ‘No’:
Goldman Sachs has predicted that in a “worst case scenario” the immediate aftermath of a ‘no’ vote, shares in Europe’s biggest companies could slide as much as 10%, given the heightened uncertainty in Europe.
Though analyst Huw Pill said a downturn may be short-lived as the European Central Bank may intervene.
Ultimately, a ‘no’ vote does not put Greece on an immediate path out of the eurozone. There may need to be a second referendum to decide that.