Greece enters uncharted territory after referendum 'no' vote

A "No" supporter waves an "Estelada" (Catalonian separatist flag) in Thessaloniki, Greece, July 5, 2015. [Photo/Agencies]

Sunday's vote was held after a week of capital controls imposed to halt a bank run, with Greeks restricted to a daily cash withdrawal maximum of 60 euros ($67). Long lines have formed at ATMs, while pensioners without bank cards have thronged the few bank branches opened to allow them access to a maximum 120 euros for the week. Queues at ATMs swelled again as the initial results of the referendum came in.

The ECB operates on rules according to which it can only continue ELA funding if Greece is in a bailout. Without an increase, it is unclear how much longer people will be allowed to withdraw 60 euros per day.

Some analysts say Greece is so starved of cash that it could be forced to start issuing its own currency. No country has ever left the 19-member eurozone, established in 1999.

The margin of victory was far wider than expected, and is likely to strengthen the young prime minister's defiance toward Europe. Tsipras was voted into office in January on a promise to repeal bailout austerity.

"This victory for the 'no' camp will unfortunately embolden the government, but is likely to do little to convince the creditors that Tsipras is a trustworthy negotiating partner who has any ability to implement a deal," said Megan Greene, chief economist of Manulife Asset Management.

"Any deal for Greece will involve a much larger fiscal adjustment than the one on which Greeks voted today. I don't think that Germany in particular will be willing to make any concessions for Tsipras."

There was confusion Sunday night over the fate of bank safety deposit boxes, with Deputy Finance Minister Nadia Valavani saying people would be allowed to remove items but not cash from them, and Alternate Finance Minister Dimitris Mardas later said the issue would have to be legislated.

Yiannis Gkovesis, 26, waved a large Greek flag in the capital's main square with supporters of the "no" vote.

"We don't want austerity measures anymore. This has been happening for the last five years and it has driven so many into poverty, we simply can't take any more austerity," Gkovesis said.

Constantinos Papanikolas, 73, who also clutched a Greek flag, said the result meant "a fresh start, a new page for Greece and for Europe, which has condemned its people to poverty."

Opposition conservative New Democracy lawmaker Vangelis Meimarakis said he was expecting Tsipras to keep his pledge for a quick deal.

"If we don't have an agreement within 48 hours as the prime minister promised, then we are being led to a tragedy," he said.

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