Greece has voted. But we don’t know yet what they’ve voted because the words that will echo through news channels and websites for the rest of the evening will be OXI and NAI, No and Yes respectively in what is literally Greek to us. We bring to you a Q&A in the format of a person who only cares about what happens if the vote goes one way or the other.
Yes means this: Dear Greek Government, Get off your high horse. We will take that shitty deal. Because we don’t have any money and the banks are shut and the ATMs are dry. The pensioners are waiting in long lines and I would like nothing more than to see them back inside their houses. Oh, I don’t care at all that 50% of Youth are unemployed and the resulting austerity in this deal will keep them that way, and probably add to elderly unemployment through cuts in spending. Also I do understand that this means we have put our tail between our legs and we have ZERO negotiating room and that the rest of the Eurozone can pretty much dictate exactly what they want us to do and we should just bloody do it. Yeah, I know you only asked about this bailout, but this bailout expired and they might give us another deal that’s even more shitty and we are indirectly telling you to take it, take anything literally, because we’re done here.
You can understand why this is political suicide for the Greeks. It leaves them with absolutely nothing.
You might say: But people are on the streets hoping to get money from ATMs. To that I say “phooey”. It appears that Greeks have taken out money, substantial amounts of it, out already. No one will admit to it, and they’ll still stand in line to get the rest.
Understand this – if the cash issue was a big problem, there would be riots on the streets, and this is likely in any country. But Greece has been surprisingly calm. Why do you think that is? They probably knew and were prepared.
According to me, they should. Politically that opens out a far better result for Greece, even if there is instability.
If they say no, they are expected to head out of the Euro. Nothing of the sort will immediately happen. Because:
Given all of this, we should see a new deal by the end of this week, which will contain some debt forgiveness, some continued austerity (but not as bad as the current deal) and things roll on forward.
We also expect the Eurozone to say this is only for Greece. Such a deal won’t be available to anyone else. But everyone will know what it means.
If they say yes, I think it’s bad for markets. The political instability (the current government might have to resign to avoid losing face completely) is not good for Greece.
If they say no, I think we get another deal out very soon. After some knee jerk reactions I expect markets to go on their way again, as it’ll be obvious the Greek can has been kicked down the road. Which markets love. So markets will start to move up, IMHO.
But markets will move up only if there is a deal on the table. And that deal has been promised in 24 hours by Varoufakis, the Greek FM. Which means the deal won’t come in for 48 hours, just for the ECB to ensure they keep some face at least. The posturing currently is unbelievable about who’s got the upper hand in what way, but you can bet that no one wants the other side to know they caved. So until the deal comes we’ll have insane volatility – the kind of “Risk on”/”Risk off” behaviour we saw a few years ago. (Read this post)
After the deal, it’s #AccheDin once again.
That’s how I read it right now. And with 30% of the votes in, Greece seems to be saying 60% “OXI”. (No)