Greece’s Prime Minister Alexis Tsipras has passed the decision over whether to accept the conditions of the country’s bailout package to the Greek public, allowing them to have their say on the austerity measures that are demanded in the package. Although it is now up to the nation to make a decision, Greek government officials have urged the public to vote “NO” in Sunday’s snap referendum.
"A 'No' vote is a decisive step towards a better agreement that we aim to sign right after Sunday's result," said Tsipras.
— Alexis Tsipras (@tsipras_eu) 1 Temmuz 2015
Greek Finance Minister Yanis Varoufakis also laid out 6 short points in his blog on Wednesday evening outlining why the leftist government is pushing for a “NO” vote.
Why we recommend a NO for the referendum - in 6 short bullet points http://t.co/7OtILGeSvz
— Yanis Varoufakis (@yanisvaroufakis) 1 Temmuz 2015
According to a recent poll conducted between June 28-30 and published in the Efimerida ton Syntakton newspaper, 54 percent of those planning to vote in Sunday's referendum oppose the bailout against 33 percent in favor.
If negotiations between Greece and its creditors restart after the referendum, Germany and other member states say that talks on a new bailout programme would have to start from the beginning with different conditions. On the other hand Tsipras said he will step aside if Greeks voted “yes” in the referendum.
Although Greece has become the first advanced economy to default on International Monetary Fund (lMF) loans, thus joining an ignominious list of less developed countries who also failed to meet their commitments to the IMF, the country has not yet defaulted on its other debts.
A “NO” vote will mean that the ECB will continue to freeze funds, most likely leading to an extension of capital controls. If Greece defaults on its debts to the European Central Bank (ECB) it will have no choice but to cut monetary funding to the country. This would then likely lead to the collapse of the country’s banking system and the Greek economy.
According to credit rating agency Moody’s, which along with Standard & Poor’s recently downgraded Greece’s credit rating, more than 8 billion euros are estimated to have been withdrawn from Greek banks over the last two weeks.