Greek referendum results

It was all a bluff. The government got elected on bs promises, knew they couldn't keep them, diverted the decision to the citizens knowing perfectly well that whatever they choose will be painful, at the same time urging the citizens for the more painful (NO) option.

EU called their bluff and now they are royally screwed. Instead of slowly paying their debt, they will very likely print their own money, which is guaranteed to be very inflational.

I assume that Varoufakis gambled that the EU/Troika would never allow a Greek default and ultimately succumb to Greece's demands. However a Greek default (at least on parts of its debt) has been very likely for quite some time now. The burden of this default would be mostly carried by the ESFS and as a consequence EU countries (because they provide the guarantees). In a worst case scenario most countries could probably cover the losses on Greek debt by issuing new government bonds themselves, which would in turn be bought by the ECB, which just further inflates their balance sheet. This is not an improbable outcome because inflation rates are still very low.

>I'm honestly puzzled by what the Greek Government's endgame is here. It looks like they've won their vote, but what's next? They return to Europe tomorrow and demand a better settlement. Why do they think the other Eurozone governments will accede to that demand?

They don't (assume it). They just know, from the results, that a worse settlement is not acceptable.

They can always default, and let the chips fall when they may.

> The bit that I've not seen mentioned prominently in many articles on this is that every billion Euros that is forgiven from Greek debt or that is provided in aid, is a billion Euros that must come from the other Eurozone economies, and by extension their taxpayers.

It's not at all a zero sum game. The other nations benefit significantly:

1) They gain political and economic stability for the institutions involved (the EU, the Euro, etc.) and for Europe in general.

2) They avoid an economic and political meltdown in a European country. Such situations spawn other problems (crime, refugees, political extremism, etc.) and those problems tend to spread across borders.

3) They gain a more prosperous and stable trading partner, which helps everyone.

4) They gain the precedent that when they are in trouble, for whatever reason, other nations will help them. Germany might recall the forgiveness of their massive crimes (and war debts) by their neighbors, enabling them to become the largest economy in Europe today. (EDIT: And all the creditor nations are depending on another country to defend them in case of war.)

5) They avoid Greece forming stronger bonds with other powers, such as Russia and China.

6) There also is the simple moral gain, that the impoverished in Greece won't be driven to further misery.

The perspective that all that matters is money, and that it's every nation for itself is unrealistic.

Doesn't that depend on where the current results come from? If you watch the results of a US Presidential election on the county level, you can see much wider swings; the cities, which vote D, often turn in their results much later than the rural counties.

(Or maybe in this case, the results really are representative. I know nothing about Greek politics.)

Not really .... their rationale isn't very good. Krugman disappoints, as is often the case. His logic is, "an elected government made unreasonable demands on other nations and when they refused, this was those countries attempting to replace the Greek government".

Well, no. It's just them refusing a bum deal. If the result of that is Syriza falls, that'll be the Greek's doing, not the EU.

Heck, the Eurozone FinMin's have been incredibly patient with Greece. It cannot be easy to negotiate professionally with people who are constantly calling you Nazis and terrorists for simply attaching some conditions to yet another loan.

If you believe the various European governments, contagion risk is small, so it's not likely to hit Spain, Portugal et al.

As the ECB can provide liquidity to European banks that are not insolvent (as it has been for Greece) they can stop bank runs from causing an issue in the short term at least.

What Greece's future is, from what I can see, far less certain. The Greeks state that they will now get a quick agreement, but that seems unlikely.

Any new bailout agreement would need to be ratified in 18 parliaments (the Eurozone) and in several of those the mood to accept the kind of deal Greece wants seems lacking.

As such it seems there will be an extended negotiation, which wouldn't be a huge issue except for the fact that Greece's banks are currently insolvent and without ECB funding don't appear to have any route back to solvency without leaving the Euro.

There may be some kind of political solution to that quandry but I have a feeling it will not be as certain and easy a path as the Greek government have currently stated.

Not necessarily, Greece in itself is a very interesting situation. Almost half of their entire countries' GDP was generated by a single city before 2011. [1][2]second link is a decent read about individual municipalities going down slowly within Attica

I claim that the steady decline of economics in that city, which might have had something to do with the Fascism rise with the Golden Dawn political party, destroyed their overall economy. [3]

Many foreign workers who made up a decent amount of the manual labor jobs in that city left in fear, meanwhile Greeks couldn't fit these jobs because of the lackluster pay and poisonous political/economic climate at that time.

[1]http://www.ansamed.info/ansamed/en/news/sections/economics/2... [2]http://www.keeptalkinggreece.com/2012/09/21/greek-municipali...

[3]http://blogs.aljazeera.com/blog/europe/high-police-support-g...

To what extent does Spain's political system manage its civil service as a spoils system for the benefit of party supporters? Greece apparently invented entire departments to pay party members.

To what extent do Spain's entitlement obligations (health care, retirement, &c) track its economy? Greece apparently provides Scandinavian-grade benefits on Alabama-grade revenues.

To what extent was Spain's accession to the EU exploited as a bonanza for foreign banks? Greece's debt is apparently the product of a ratings arbitrage scheme that occurred when its speculator-grade sovereign debt suddenly became backstopped by the ECB.

To what extent do Spain's citizens buy into the financial philosophy of the EU? Greece has massive self-employment, a thriving undocumented market, and pitiful revenue collection. For decades, Greece has "financed" itself with stated revenue preferences (high tax rates) that do not meaningfully track revealed revenue preferences (low tax collection and enforcement).

In Spain the Syriza friendly Podemus is already in the lead, but they need to wait for the next elections, to re-evaluate their payment terms. In Portugal the Syriza-friendly PS will win in October.

While the right wing extremists, Germany, but also the EU officials Juncker, Draghi, Lagarde, Djiselbloem, Schulz, Schaeuble, Merkel and their press corps are still violently trash talking and lying about Syriza, effectively burying the EU. Everyone knows that they are wrong and lost face. They were all caught lying and doing too much damage with our economy and the EU project. Syriza is their best chance to get Greece implement the necessary reforms in the next 10-20 years. The established Greek parties caused the situation and Syriza is their best chance to turn it around. They are also the ones who are not lying.

Germany got to backup the defaulting EMS fonds which will hurt them. A lot. Why they are still not trying to save them is beyond my understanding.

Greece could try to talk them to senses, because they have the numbers, the morale and the people behind them, but it does not look like so. So effectively all the next european elections will be won by the left, and Goldmann-Sachs (Draghi) & IMF will have it much harder than now.

Which is good. Even Germany is not following their own austerity measures. They cheat over France by going on with their low-wage policies and they cheated over the inflation caps.

Greece is in bad shape but might actually do better from having more independent control while sorting out its finances as the direction from Europe at the moment suffers from severe conflicts of interest. Either a yes or no vote could have bad consequences as Greece is between a rock and a hard place right now, but the reputation of the Eurozone leaders is what really took a hit here, not Greece.

This is not the same at all. Greece has seen several years of economic depression on the order of America's experience during the Great Depression. Many people are leaving already to find work. A Greek threat to emigrate is not empty.

I guess they can join the ones who said the same thing when George W. Bush was re-elected.

Uh, no - this is a completely different situation. Whereas gay marriage has little to no effect on most Americans' lives, the results of this vote will affect each and every Greek citizen for years (decades?) to come.

Moving abroad (assuming that option is available to you) might simply be the rational thing to do in such a case.

In the case of gay Marriage, there were very few consequences for anyone, beyond gay men and women being able to get married.

In contrast, the outcome of this referendum will have significant effects on the lives of ordinary Greeks for many years to come.

Equally ridiculous when you consider that gay marriage was legalized in Canada by the Civil Marriage Act of 2005.