Greek Crisis Enters Frightening New Chapter After Referendum Vote
The people of Greece spoke decisively this weekend as they voted "no" to the conditions of a rescue package that would have delivered increased austerity measures to their nation. With this weekend's "no" vote, the chances of a "Grexit" (Greek exit from the European Union) have come closer to reality.
Before the referendum was held this weekend, many were predicting that the final result would be extremely close. This wasn't the case at all, as a full 61% of Greece voted against the conditions of the rescue package. The common refrain in Greece? We've suffered enough - no more.
The Greek economy has been decimated in recent years thanks to sky-high unemployment and harsh austerity measures. Prime Minister Alexis Tsipras said that the people of Greece had made a "very brave choice" and that the country had endured a national "humiliation" up until this point.
Greek banks had been closed over the past week in the lead-up to the referendum. Prior to that, banks had been open but cash withdrawals had been limited. Many people in Greece had been hoarding whatever they could in the lead-up to the referendum, including gasoline, food, water and Euros.
Alexis Tsipras believes that the result of the referendum strengthens Greece's position at the bargaining table and that he will be able to extract a more favourable deal as a result.
Others, including Germany economy minister Sigmar Gabriel, believe that "Tsipras and his government are leading the Greek people on a path of bitter abandonment and hopelessness."
One thing is for sure - the chances of Greece leaving the European Union have heightened as a result of this vote.
According to European bookmakers, Greece now has a 6/4 chance of leaving the European Union in 2015.
If Greece leaves the European Union and adopts their own currency, the odds of other countries leaving as well increase dramatically. Cyprus, Malta and Latvia are seen as some of the likeliest candidates to leave if there is a "Grexit".
Stock futures are down 1.5% - this week will be interesting.
Filed under: General Knowledge