More than 60 percent of voting Greeks have soundly rejected conditions for a further bailout from European creditors, pushing the country closer to financial chaos.
By rejecting the conditions set forth by European Central Banking authorities, the country’s own central banks could run out of funds in a matter of days, forcing the government to issue a new currency within Greece to continue day to day activities.
The problems that a renewed sovereign currency could create in the economy are untold, but so far Greek officials have made clear that this is not within the plans. However, if there simply is not money in the system to achieve day to day goals such as grocery shopping and getting to work, something will have to be done. By all accounts, the ECB is expected to continue limited emergency assistance to Greek banks for the near future.
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The Greek administration has repeatedly touted a line that by demonstrating a lack of support for austerity measures amongst its people, it will have a stronger bargaining position against such measures in its bargaining with others in the European Union. Alexis Tsipras, the Greek Prime Minister told his country via televised address:
The mandate you gave me is not the mandate of a rupture with Europe, but a mandate to strengthen our negotiating position to seek a viable solution.
The economic problems in Greece are not only about the government being recently unable to pay its bills, however. The country is facing extremely high unemployment rates and has very little in the way of industry to bring it out of this mess in the near future. The Greek government is reluctant to go into any more agreements that the people may ultimately reject, even if it means temporary turmoil and uncertainty. At the same time, the lenders need to see changes in order to make any more extensions to Greece.
Image from Pixabay.