On 5 July, the Greek people voted overwhelmingly to reject the principles of the framework agreement that had been presented by the European Central Bank, the International Monetary Fund and other international creditors. In a historic referendum, the Greeks sent a clear message that they did not want to continue with the austerity measures proposed by their International creditors and wanted more choice in how to run their own country.
The referendum will either serve to set the boundaries for any negotiations - clearly the intended Greek strategy - or lead to a hardening of the ECB’s resolve, leaving an exit from the Euro as the only practical solution to Greece’s current cash liquidity issues. Either way, a decision needs to be made soon, as Greece’s cash supplies continue to dwindle on a daily basis and general unrest in the country grows.
In this client alert, Richards Kibbe & Orbe associate Miriam Karam discusses the "no" vote and its potential effects for investors.