The eyes of the financial world are on Greece as they prepare to vote this Sunday on a financial referendum, that among other things, will decide whether Greece continues to maintain its status as a member of the European Union.
Greece’s financial woes have been at the center of the global financial crisis over the past few years, with Germany and the European Union alongside it providing much of the support that has kept the island nation afloat over the past few years.
However, this Sunday’s vote may have a broader impact on global finances than almost any other action taken in response to the recession. The Greek government, headed by Prime Minister Alexis Tsipras, is largely in support of the no vote. The no vote, (or oxi vote as it’s called in Greek), entails a course of action that would see Greece exiting from the eurozone and beginning the process of developing an independent financial system.
Financial analysts do not entirely agree on what would happen as a result of this in the long term, though in the short term it appears it would cause a drop in the value of the euro and a raise in the value of the dollar as well as a whole slew of complications as a result of these sudden changes.
A yes, (nai in greek), vote comes with its own set of complications. While it would provide for a more stable short-term solution, Greek banks will not necessarily be able to open without access to liquid cash to provide to people. Alongside this, because the government favors the no vote, a yes vote would lead to substantial issues in negotiations between the government and potential creditors who would be wary to work with an unsupportive government.
It is next to impossible to predict exactly how the vote will impact global finances, but financial planners the world over would be wise to have their eyes on Greece this weekend as the split nation comes to a decision on the best course of action to deal with its financial woes.