What will the Greek referendum this Sunday mean for the country?

July 4, 2015 Updated: April 23, 2016

Last week Greece has gone into technical default on its loans from the IMF for the first time in history, which means that the country is officially bankrupt. The referendum that will take place this Sunday after a week of intense negations with its creditors, will be salient, as it might change the future of Greece’s position within the Eurozone. 

While the flow of cash has dwindled across the nation, and banks have been closed in the past week, Greece will decide whether it will accepts another bailout to keep the nation afloat. The Greek finance minister has made it clear that he thinks that the creditors have been “terrorizing” the nation into accepting austerity

The question is: “Should the plan of agreement, which was submitted by the European Commission, the European Central Bank and the International Monetary Fund in the Eurogroup of 25.06.2015 and is comprised of two parts that constitute their unified proposal be accepted?”

The referendum will ask the question whether Greece should accept the terms proposed by the E.U, IMF, and the ECB on June 25th. If the answer will be YES than Greece will be given a new bailout but with a great deal of austerity propositions. If the turnout will be NO, Greece will not take EU and IMF aid and will most likely revert away from the Euro currency as some economists have suggested. 

Yet the issue is not in fact so black and white. Although a No vote would mean Greece would turn away from the EU, a Yes vote would only make that less likely and not make the issue go away fully. 

This Saturday Greeks rallied in the ‘No’ and ‘Yes’ camps each expressing their concerns for the future of their country. Many have shown concern that a NO vote will mean further economic contraction, the continuation of bank closures, and a return to the Drachma which is much weaker than the Euro. However a Yes vote will not be that much better as Greece would have to comply to a series of severe rules, which would also mean a contraction in its economy. 

Yet a YES majority would lead to the end of the current Greek government which would lead to further political uncertainty in the foreseeable future. It is for this reason why it is promoting that people vote No, while the E.U. is recommending that Greece votes Yes.

There is no real right or wrong choice in this referendum as the current crisis cannot be resolved either by a YES or a NO, as the political, social and economic ramifications that will result from this Sunday will indeed be obvious either way. The fact that the nation’s stability is found in great complication is not just a paramount problem for the country, but also for the entire European Union, and even places such as Canada. 

Some people in the ‘No camp’ have suggested that a Yes turnout would only prolong Greece’s “slavery” to the E.U. Others believe that if the country does not accept E.U. aid things will only continue to get worse, despite austerity.

Greece is ready to vote tomorrow, and Europe is watching closely.