What does a “no” vote mean for Greece and Europe?
Tonight the Greeks have shocked Eurozone officials by voting "no" to more austerity measures in return for unblocking aid that the cash-strapped country so desperately needs.
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Prime minister Alexis Tsipras
"No" doesn't necessarily imply Grexit
A "no" vote, in which the current government becomes more politically entrenched. This is likely to be viewed negatively by the markets. We do not see such an outcome as necessarily implying a definitive "Grexit".
In the first instance, such an outcome is likely to perpetuate the status quo: the European authorities would neither extend further financial liquidity support nor engage in a new round of negotiation with the Greek government offering more favourable terms.
As a result, Greek banks would remain closed and the economic situation would deteriorate, ultimately triggering political change as the economy seizes up.
Of course, that change could move in a chaotic direction leading to a 'Grexit. Uncertainty is clearly higher in this scenario. But our base case would remain that any attempt to shift policies in the direction of exit would prompt a domestic political response bringing down the government and moving to an accord with Brussels to maintain membership of the Euro area,