The Next 2 Days Are Crucial for Greece

Finance chief quits with pride
By Rob Quinn,  Newser Staff
Posted Jul 6, 2015 4:19 AM CDT
Updated Jul 6, 2015 6:52 AM CDT
Greek Finance Minister Yanis Varoufakis puts on his motorbike helmet as he leaves his office in Athens.   (AP Photo/Daniel Ochoa de Olza, File)
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(Newser) – Greece delivered a resounding "no" to creditors' demands for tough austerity measures in return for continued bailout aid—and while the development is being widely described as huge, nobody is sure exactly what it will mean for the country, or for the European Union. But with the country's banks almost out of cash, the next two days are expected to be crucial for Greece's future. Key developments:

  • Finance Minister Yanis Varoufakis will not be guiding the country on its journey into uncharted territory, the AP reports. He resigned early today, saying Prime Minister Alexis Tsipras believed it would be easier to reach a deal with creditors if he left. The "no" vote, he said, "will stay in history as a unique moment when a small European nation rose up against debt-bondage," and he "shall wear the creditors' loathing with pride."

  • There will be plenty of talks in the days ahead, including an emergency eurozone summit tomorrow night, but some analysts believe Greece and its creditors have now moved so far apart that a Greek exit from the eurozone is a lot more likely than a new deal, which Tsipras insists must involve a restructuring of debt. Germany's Deputy Chancellor Sigmar Gabriel says Tsipras has "torn down the last bridges, across which Europe and Greece could move toward a compromise," the BBC reports.
  • Greek banks are supposed to reopen tomorrow, but they are believed to have just $1.1 billion in cash on hand—which will probably be snapped up very quickly by anxious Greeks—and whether they get more will be up to the European Central Bank, reports the New York Times. Bank officials will meet today to decide whether to extend emergency loans to the Greek banks despite the referendum result.
  • If the banks do collapse from lack of cash, one outcome could be them reopening with a different currency, the BBC notes—or, alternatively, it could be a development worrying enough to persuade European authorities to work harder on a new deal.
  • European leaders are still working on their response to the "no" vote, which is seen as a huge setback for German Chancellor Angela Merkel in particular, the Guardian reports. A British government spokesman says the UK will do "whatever is necessary to protect its economic security."
  • The markets, meanwhile, have begun to deliver their verdict: Asian markets and oil prices dropped significantly in early trading today, although the euro has held steady so far.

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