The vote is in and the Nays have won. Greece went to the polls Sunday and overwhelmingly rejected any terms of a rescue package from its creditors.
It is now quite likely that the Greek banks will be unable to secure any more Euros as emergency liquidity and will be cash dry within the next 48 hours. This scenario may well force an exit from the Euro, albeit a possibly temporary one, as an emergency move to prevent civil unrest and the total collapse of the Greek economy.
Emergency Tuesday Summit
The governing board of the European Central Bank called a conference for Tuesday to determine its response to the strong victory of the “No” camp which came as no surprise. Four opinion polls released as the polls closed all predicted “NO†victories, and anecdotal reports from within Greece suggested a far greater visibility and enthusiasm on the part of the “NO” camp. Perhaps more significantly, the “NO” vote was backed by the parties that won a majority in a general election only a few months ago.
Generally, the more affluent and the older populace favored “YES”, and the younger and poorer favored “NO”.
The Greek government can be expected to aggressively demand that the ECB respect Greece’s membership within the Eurozone and the democratically expressed will of the Greek people, and provide Greek banks immediately with sufficient emergency liquidity to allow their re-opening within the next day or so. The Greek government will feel that they have made a courageous gamble that has paid off in their favor.
The Eurozone will now have to respond to its first serious challenge to the Euro project since its inception.
