Greek Referendum: What Happens Next?

On Sunday, voters in Greece rejected by an overwhelming 61.3 percent vote the austerity proposal that was submitted by the European Commission, the European Central Bank, and the International Monetary Fund leaving many stunned and analysts wondering what happens next.

As Chris Albirtton wrote before the vote tally was final, “The Greeks invented democracy and, let’s not forget, tragedy.”

The tragedy for Europe is likely a worsening of the crisis involving an influx of migrants flooding onto the Continent’s shores.

“If Greece is forced to leave the Eurozone, it will likely re-issue its old currency, the drachma, and devalue its debt. This will lead to chaos in the medium term with a lot of hardship for Greeks. Pensions will lose most of their value overnight and young people will not be able to find jobs. That means they’ll soon start to vote again—with their feet. Europe should expect an influx of Greeks flooding into the EU looking for work,” he predicts.

One immediate result was the resignation of Greek Finance Minister Yanis Varoufakis, who claimed he stepped down to make it easier to find a solution to the fiscal crisis.

But Germany is hesitant to welcome Greece back to the negotiating table, according to Chancellor Angela Merkel’s spokesman Steffan Seibert who said the time is not right to start negotiations for a new bailout package with Athens.

Will Greece leave the Eurozone? Will it return to using the drachma? Will European leaders leave Greece to fend for itself? These are some of the questions posed by London’s Telegraph in an article laying out the possible paths ahead.

The Wall Street Journal also provides context moving forward.

Markets have reacted with stunning calm to Greece electoral results, Beat Siegenthaler, adviser at UBS, told the WSJ.

“This may be based either on the view that Greece in fact doesn’t matter that much from a broader perspective, or that tomorrow’s EU summit will be the start of a more fundamental solution to the problem,” he said.

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