So, what happens next?

Expect a bitter week of recriminations, unease, and fear. Greece’s creditors blame Greece for breaking off negotiations, and further aid will not be forthcoming without a drastic change of heart from the Greek government. In the meantime, the ECB’s emergency support is capped, but not withdrawn, ensuring a low level of life support for banks that are clinging to cash by closing their doors and restricting transfers. This is the backdrop for the run-up to the referendum.

Greek Finance Minister Yanis Varoufakis holds a news conference during a Euro zone finance ministers emergency meeting on the situation in Greece in Brussels, Belgium June 27, 2015.
Feeling the pinch.
Image: Reuters/Yves Herman

For his part, Tsipras is poised to push for a “no” vote via a “campaign with nationalist-populist overtones and based on messages of defiance, resistance against ‘foreign intervention,’ oppression by [creditors] and giving a say to voters,” says Wolfango Piccoli, an analyst at research group Teneo Intelligence. These are the themes that propelled Syriza to power in the first place, and for which it maintains high approval ratings.

But polls show that a majority of Greeks also want to stay in the euro zone. Indeed, Greek finance minister Yanis Varoufakis admitted to reporters that there is a “very high probability” that Greeks may vote “yes”—that is, approve the lenders’ proposals against the wishes of the government.

Needless to say, this would put the government in a difficult spot, and almost certainly require a leadership reshuffle or possibly a fresh election. The opposition will point to the panicky queues at cash machines and shuttered bank branches as signs that the government is pushing the country out of the euro and into uncharted territory. Analysts also expect volatility across European markets, with investors retrenching to the safest assets and dumping the euro. And history shows that capital controls tend to remain in place for a long time without drastic action.

And so the Greek people have been thrown into the deep end, their financial future more uncertain than ever. In a week’s time, they will be asked to make a choice that will determine the economic path of their country, with both options bringing different sorts of pain onto a people who have already suffered greatly.

Like so much else to do with the dealmaking over the past several months, the actions of the key players—on both sides—feel improvised at best, incompetent at worst, and incoherent throughout.

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