GREECE VOTES 'NO' : NOW WHAT?

GREECE VOTES 'NO': NOW WHAT?

Greece's voters have returned a resounding 61% "no" in a historic referendum on whether to accept the austere bailout terms offered by the country's international creditors.

The vote only extends Greece's financial crisis, with no clear outcome on the horizon. Here's what is likely to happen next:

Greek prime minister prepares new bailout strategy

Greek Prime Minister Alexis Tsipras met with leaders of opposition parties in Greece's parliament on Monday to share his strategy for negotiations with creditors on a new bailout deal. Tsipras had called for the referendum and urged a "no" vote to strengthen his hand in getting a better deal, but it's not clear if the creditors will offer new concessions. The party leaders backed Tsipras in pursuing new talks.

New Greek finance minister named

The Greek government named economist Euclid Tsakalotos as the new finance minister after Yanis Varoufakis resigned at the prime minister's urging Monday because his abrasive style alienated the creditors. Tsakalotos, 55, was the prime minister's lead bailout negotiator in talks with the nation's creditors. Tsipras believes a less in-your-face finance minister might help pave the way for Greece to "achieve a deal."

Greek banks stay closed

The Greek government said banks would remain closed at least through midweek and continue to limit daily ATM withdrawals to preserve dwindling reserves of cash and prevent a run on deposits. The European Central Bank has said it will maintain current levels of emergency lending to prevent a collapse of Greece's banking system, but the ECB also upped the amount of collateral it wants for the loans, adding to the squeeze on the banks.

Eurozone holds emergency summit

Leaders of the 19-country eurozone, which all use the euro currency, plan to hold an emergency summit in Brussels on Tuesday to discuss how to respond to Greeks' rejection of their bailout terms. German Chancellor Angela Merkel, head of Europe's largest economy and leader of a hard-line approach to Greece, showed no sign Monday of softening her stance that Greece tightens its belt in return for new loans.

'Grexit' more likely

Greece may be forced to leave the eurozone if it's unable to negotiate a deal to repay its debts. A return to the Greek drachma, which would be worth far less than the euro, would immediately boost Greek exports but would send the cost of imports soaring. The unprecedented exit from the eurozone would also raise questions about whether other eurozone nations in financial distress may follow suit in the future. Such uncertainty has financial markets around the world on edge.

Bibliography:

ü  USA Today

ü  Google

ü  Telegraph