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Well today is Sunday the 5th July, the day after the anniversary of US independance but certainly today was an event of much more importance to the future of a European Union. The Greeks have voted no to the current offer from the EU of more money based on specific austerity measures.
It’s a difficult one to call, at the moment I’m watching the news on the BBC and there are pictures of Greeks dancing in the street at the result. I’m watching from a cafe in Western Paris known for it’s fast internet access even with a VPN to help watch BBC News live – available here.
So what’s next? Does the Greek Government now have a mandate to negotiate real change in the debt restructure? Well the reality is probably not, Greece is unable to function for more than a few days without a serious cash injection. It is certainly not a position of strength, although many would argue that a democratic mandate from a few million Euro citizens should count for something.
There are many Euro officials, probably not easy to find now, that stated that a ‘No’ vote was basically a vote to leave the Euro and rejecting the terms of the creditors. The problem is that when the amounts are this large creditors are not really acting from a position of strength.
You can’t send in a firm of bailiffs to a country to recover a few billion euros, after all where will sell a few hundred thousand flat screen TVs with all the settings set to Greek. The reality is that a default and exit for Greece will be devastating for both sides, so I feel that a compromise will definitely happen. You can get really upset about someone not paying you back 50 billion euros, but losing another 200 billion euros as your currency and economy crashes is not going to cheer you up.
Time will tell on what happens, at the moment I’m treated myself to buy IP address, so that I could watch all the different News sites and listen to experts across the world. There seems to be little common consensus, but the reality is that the amount that will be wiped off Euro stocks, the economies of the Eurozone and many other areas, will be many times more that the Greek debts will mean that someone will give ground. My money says that Greece have played a very shrewd game and will benefit from this no vote, however I could be completely wrong.