Greek voters have voted in a referendum on whether their country should accept the terms of a new European Union bailout package.
They’re still counting the votes, but so far the “No” vote has the lead. In other words, “No” the Greek people do not want to accept strict fiscal-austerity measures in exchange for desperately needed bailout money.
Before Sunday’s vote, early surveys and forecasts showed that the “Yes” vote was likely to win as it seemed to mean less financial and economic turmoil in the near term. A “No” vote would push Greece closer to exiting the eurozone currency union, which could mean many more years of economic pain.
In a post on Facebook, Allianz’s Mohamed El-Erian offered a brief preview of things to come should the “No” vote win.
“IF this historic “no” win is confirmed, look initially for a general selloff in global equities, along with price pressures on the bonds issued by Greece, other peripheral Eurozone economies and emerging markets,” he wrote.
And then what? Here’s El-Erian:
What happens next is a function of three main things:
- whether Greece and its creditors can work together to reconcile what were two very different interpretations in the run-up to today as to what a “no” outcome means, and do so very quickly and effectively;
- whether already horrid conditions on the ground, including the high likelihood of further delays in re-opening the banks and significant difficulties getting fresh money into ATMs, provide enough time for the politicians to get their act together; and
- whether the ECB rolls out new measures to contain contagion.
If there’s one thing most people agree on, it’s that something needs to be done quickly.
“It may soon be time for all parties involved to shift to their Plan B, with the main aim being to counter as quickly as possible the likelihood of further human suffering, pain and uncertainty,” El-Erian added.
Read El-Erian’s whole post on Facebook.