Greece Votes ‘No’, Grexit Looms, GFC Sequel On Its Way?

A lot of people believed it would never come to this and there was a lo of money invested in Greece staying put.

All of a sudden, that wager is looking grim.

ABC News reports:

Greeks have overwhelmingly voted “no” to the terms of a European bailout, risking financial ruin in a show of defiance that could splinter Europe.

You bet it could. The European Union experiment might very well be over with this bold move. Keep in mind that Portugal, Spain, and a few other are in similar economic shape.

The report continues:

Official results from the ministry of interior showed “no” ahead with 61.5 per cent compared to 38.5 per cent for the “yes” vote with nearly 95 per cent of votes counted.

Thousands of Athenians have gathered in central Syntagma Square to celebrate the result, despite warnings that failure to reach a deal with the creditors could trigger a Greek exit from the eurozone.

The radical left government of prime minister Alexis Tsipras had lobbied for a “no” result in the referendum in a bid to strengthen its hand in negotiations with international creditors, deeming the austerity measures “humiliating”.

“Greeks made a brave choice … the mandate is not to clash with Europe [but] to reach a viable solution,” he said of the result.

“There are no easy solutions, but fair solutions provided both sides want it,” he said, adding “Greece will go to the negotiating table tomorrow with the goal of restoring the banking system”.

In light of the overwhelming “no” vote, Greek conservative opposition leader Antonis Samaras resigned from his post, stating the current situation will require new leadership.

A “no” vote leaves Greece in uncharted waters: risking financial and political isolation within the euro zone and a banking collapse if creditors refuse further aid.

But for millions of Greeks the outcome was an angry message to creditors that Greece can longer accept repeated rounds of austerity that, in five years, had left one in four without a job.

“This is an imprint of the will of the Greek people and now it’s up to Europeans to show if they respect our opinion and want to help,” said Nikos Tarasis, a 23-year-old student.

The mood in central Athens is celebratory right now, but it will be interesting to see how long celebrations will last.

Euro zone leaders warned a “no” vote could lead to what is being called a “Grexit” — Greece sliding out of the single currency zone.

As the polls closed at 7:00pm local time (2:00am AEST), Greece’s government said it wanted to resume talks with the country’s international lenders immediately to clinch a deal to keep it afloat.

But euro zone officials have shot down any prospect of a quick resumption of talks.

One official said there were no plans for an emergency meeting of euro zone finance ministers on Monday, adding the vote outcome meant the ministers “would not know what to discuss”.

I had a colleague tell me other day that Greece’s economy is small in comparison to Autralia’s and that these events can hardly have a big impact.

But the size of Greece’s economy is irrelevant while a hundred other factors are, such as who and how much was wagered on and invested in Greece remaining in the EU, not to mention Greece’s defiance giving rise to similar attitude from Portugal, Spain , and anyone else wanting to avoid paying their debts.

As I have posted previously, I believe this is just one symptom of a systematic and unavoidable problem that we will all soon be dealing with – one that will transitions the way our economy functions in a significant way.

Time will shortly tell if this is indeed the case.


Feel free to discuss.

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