Greek Referendum – What a ‘Yes’ or ‘No’ vote on July 5 would mean?

This post is written by Shiv Kukreja, who is a Certified Financial Planner and runs a financial planning firm, Ojas Capital in Delhi/NCR. He can be reached at

Greece debt crisis is deepening. Neither the Greece government nor its creditors are ready to budge this time around. Greek Prime Minister Alexis Tsipras has been making contradictory statements which has made this crisis more complicated and the creditors are now readying themselves for an actual default.

Two days from now on July 5th, Greeks will cast their votes in a referendum in which they decide whether their government should accept or reject the proposals made by its creditors – International Monetary Fund (IMF), European Union (EU) and European Central Bank (ECB). These entities are collectively known as the Troika.

If Greeks vote ‘NAI’ (YES) while casting their votes, it would mean that they have voted in favour of the Troika’s proposals and they want the Troika to provide the Greece government a much needed bailout package. In exchange of this bailout package, the Greece government will have to implement some strict austerity measures involving spending cuts, tax increases and speed up economic reforms.

On the other hand, if they opt for ‘OXI’ (NO) while voting, it would mean that they are not in favour of any kind of austerity measures or tax increases and they are ready to live in a situation in which their government could be officially announced as in default and their top banks would go bankrupt in no time.

Tsipras has urged Greeks to vote against the bailout offer, saying ‘No’ to the proposals. It seems that a ‘No’ to the creditors’ proposals in Sunday’s crucial referendum would lead Greece out of the eurozone and probably out of European Union as well.

All these developments could derail an already fragile global economic recovery and would put more pressure on the global central banks to try and introduce more innovative measures to keep their respective economies floating.

It is a highly uncertain economic environment that we are living in for the past few days and it seems that uncertainty will prevail for a few more days, weeks and months before a clear picture emerges out of this crisis.

2 thoughts on “Greek Referendum – What a ‘Yes’ or ‘No’ vote on July 5 would mean?”

  1. I feel that they will say Yes because they want to be in the Eurozone, and they are now in a situation where they can’t even withdraw their own money from the banks. They will probably say yes to ease over that situation.

    1. Yes, even I think so. Tspiras hasn’t been able to control the situation and things are getting bad to worse due to his insensible decision making. So, despite of a huge pressure from the Troika, Greeks would prefer to come out of this bad situation. I think that is what even Indian markets are factoring in right now.

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