Greeks waved flags and danced in the streets after they overwhelmingly voted to reject further austerity measures from their international creditors. But now comes the reckoning, as Greece faces the realities of an economy out of money and creditors out of patience.
Here are some of the fundamental questions:
When will the banks reopen?
There’s no firm date yet. The banks have now been closed a week and look likely to remain shuttered for at least a few more days. The Greeks are allowed to withdraw only 60 euros ($66) a day from ATMs. But even this won’t be sustainable without new infusions of cash.
Ordinary Greeks have been lurching from crisis to crisis for five years and they have handled the bank shutdown with relative calm so far. But if the banks remain closed, if people can’t get more money and if businesses can’t function, the crisis could escalate rapidly.
“If there’s a signal from [European leaders] that they’re going to pull the plug, people may start running to supermarkets and buying whatever they can,” NPR’s Joanna Kakissis, reporting from Athens, told Morning Edition.
The Greek economy minister, Georgios Stathakis, told the BBC that the European Central Bank needs to keep Greek banks afloat for up to 10 days to allow emergency negotiations to take place.
What are the prospects for negotiations?
European leaders have scheduled an emergency meeting Tuesday in Brussels. Several governments have already expressed disappointment with the outcome of the Greek referendum, and there’s no indication at this point that they will offer better terms than those Greece has rejected already.
The two most important players are Germany, which has been taking a harder line toward Greece, and France, which has been taking a softer position.
German Chancellor Angela Merkel and French President Francois Hollande are meeting in Paris on Monday evening. For years, European leaders and Greece have kicked the can down the road. But the Europeans have grown increasingly frustrated with Greece, and Sunday’s vote has injected a genuine sense of urgency to find a lasting solution.
Is Greece now likely to leave the euro?
The cost of a Greek departure from the eurozone would be high. Greece’s creditors would have to write off much or all of billions of euros in Greek debts. Greece would lose its access to international capital markets and face a messy and complicated restructuring.
The cost of keeping Greece in the euro is also high. It’s not just the additional financing the country needs, it’s the precedent it would set by making special concessions that have not been granted to other troubled European economies.
Most Greeks say they want to stay in the eurozone, according to the polls. But the referendum vote is the strongest sign yet that Greece could be the first country to leave the zone, now consisting of 19 countries.
“By letting Greece go its own way and potentially plunge into misery is going to be a very, very tough decision to make,” Gabriele Steinhauser, a Wall Street Journal reporter in Brussels, told Morning Edition.
“At the same time, if [European leaders] now relent to some of Greece’s demands, they are setting a very dangerous precedent for other countries that have also been asked to implement very tough austerity measures,” she added.
What would happen if Greece reverts to its own currency?
Before the euro, the Greeks had the drachma and it was a weak currency. Economists appear virtually unanimous in saying the downside of bringing it back would be overwhelming.
In a best-case scenario, a new currency would be introduced after years of planning and at a time of stability, not amid financial chaos.
Greece would face extreme difficulty in getting foreign loans, and the government would face a constant temptation to print more money to meet its obligations. That would further weaken the currency and risk runaway inflation.
“The government says it has no plans to exit the eurozone and no plans to start printing their previous currency,” Kakissis said. “They know what a disaster this would be. The drachma would be so devalued, people’s saving would evaporate, their pensions would be worth far less than before. And so much is imported in Greece, so Greeks wouldn’t be able to buy much.”
What would the fallout be in Europe and beyond?
Global markets have dipped because of the Greek crisis, and there are several examples in recent decades where an economic meltdown in one country has rippled across the globe. Think Thailand in 1997 or Argentina circa 2000.
But some European leaders and economists argue that the Greek drama has been playing out for so long that outsiders have had ample time to limit their exposure.
Greece accounts for less than 2 percent of the output in the eurozone. The Wall Street Journal produced this graphic to provide some perspective on the modest size of Greece’s economy in relation to its EU counterparts.
The biggest potential loss: Greece’s departure would take away a quarter of the EU’s olive oil production.
Greg Myre is the international editor of NPR.org. You can follow him @gregmyre1.