A day after an unprecedented referendum in which Greek voters rejected an offer by creditors to continue their bailout of the country’s finances in exchange for strict economic reforms, the fate of Greece and its proud people lie in deep uncertainty.
With a vote of 61-to-29 percent, the Greeks resoundingly said “no” to their European partners’ plans to continue financing Greek debt under the condition that Greece would pass more “austerity” measures such as cuts to pensions and spending programs and increases in the value-added tax.
Now, though everyone seems to deny the possibility of a Greek expulsion from the 19-member common-currency Eurozone, the path to keeping Greece in the union isn’t clear.
Key European leaders are sending mixed signals.
Eurogroup (group of finance ministers of the Eurozone)
The head of the Eurogroup, Dutch Finance Minister Jeroen Dijsselbloem, suggested the group would “now wait for the initiatives of the Greek authorities.”
European Commission
Valdis Dombrovskis, European Commission Vice-President for the Euro and Social Dialogue, indicated that the financial stability of the Eurozone comes first and that the EC would consider “all available means.” He added that he cannot negotiate a new bailout without a mandate from the Eurogroup.
European Council
European Council President Donald Tusk announced plans to hold a special “Euro Summit” meeting July 7 for heads of state or government of Eurozone countries to discuss a way forward.
International Monetary Fund
Christine Lagarde, the managing director of the IMF, said the fund would “stand ready to assist Greece if requested to do so.” It is unclear in what form the IMF would do so, considering the Greek defaulted on its debt to the fund just last week, marking the first time a developed country defaulted on an IMF loan.
Greece Itself
Greek prime minister Alexis Tsipras said he is drawing up new plans to present to the Euro Summit leaders. The Greek Finance Minister Yanis Varoufakis resigned his post, making way for a new one.
According to The Independent in the U.K., Tsipras will ask for a 30 per cent debt write off.
He has already asked European partners for additional stability funds and an extension of the financial assistance arrangement, which expired June 30 — so far with not much luck. His next step is likely to be a request for humanitarian funds.
Meanwhile, in Greece, the young celebrated while the old cried. Greek banks remained closed until Thursday with limits on ATM withdraws. They’ve suffered five long years of economic pain following their country’s debt crisis started at the end of 2009.
