Greece Puts Its Fate to a Vote

The Greek government will hold a referendum July 5 that could mark the beginning of the country's exit from the eurozone, although the government did not directly consult the public when it joined the currency area over a decade ago. This nationwide vote, announced by Prime Minister Alexis Tsipras June 27, would ask whether Athens should adopt the economic policies Greece's creditors have demanded in exchange for additional funds. The Greek parliament was to vote later today on whether to approve the planned referendum.

While the nationwide referendum would not directly address eurozone membership, a rejection of additional EU and International Monetary Fund money would put Greece close to a debt default. This would lead quickly to an exit from the eurozone. Even if the public accepts the bailout measures, Greece will likely not be able to avoid capital controls to protect its banking sector. During a meeting of eurozone finance ministers on June 27, Greece's creditors rejected a Greek request to extend the current bailout program expiring June 30.