Today’s shock announcement that the people of Greece overwhelmingly said “no” to Europe’s rescue package has put the nation in a tenuous position.
By backing Prime Minister Alexis Tsipras and rejecting the ongoing terms of the bailouts from its creditors –— the European Central Bank, the International Monetary Fund and the European Commission — Greece has chosen a future no one can predict.
The only known factor is that more than 61 per cent of Greeks were not willing to face five years of further austerity measures.
The gamble is that the move will force creditors back to the negotiating table, where they will have to offer terms more acceptable to the Greeks in managing the massive, 240 billion euros ($A352.66 billion) debt Greece owes.
But whatever comes next, it needs to happen fast – last week, Greek banks reported they held only €500 million in cash reserves.
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If Germany, along with other creditors decide to take a hard-line approach, it’s possible Greece could be booted from the EU and will experience a period of great upheaval as Greeks reintroduce the drachma.
Speaking after the results of the referendum were announced, Mr Tsipras insisted the vote did not mean a break with Europe.
He said membership of the European Union is meant to be “irreversible”, with no legal avenue to evict a country.
He told the people of Greece, “Together we have written a bright page in modern European history. We proved even in the most difficult circumstances that democracy won’t be blackmailed.”
German Chancellor Angela Merkel and French President Francois Hollande called a European summit for Tuesday. They say the Greeks’ decision must “be respected”.
Do you think Greece has made the right decision to walk away from the deal on the table in hope for a better one?