That’s all from us today, thank you for contributing to our Q&A. Feel free to continue the discussion in the comments below.
Guardian staff The IMF said it would not be prepared to put a proposal for a third bailout to its board unless it included a Greek economic commitment to reform and relief of some of the country's debts.
There is nothing to sign up to currently. The proposal has been withdrawn, the eurogroup say. In practice, it would be put back on the table. The eurogroup can't lobby for "yes" and then whack the Greeks anyway.
In case of an injunction or the State Council finding a way to cancel the referendum altogether, how would we expect markets to move/react? Would it be considered risk positive or risk negative?
Guardian staff Last I heard it would probably go ahead anyway because parliament voted for it. I think Tsipras sees it in any case as a kind of uber-opinion poll.
In your view, what is the exact reason that the IMF and other creditors have insisted upon measures that hit normal people (medicines, electricity, etc.) instead of tackling shipping taxes and other big business? Is it really in order to topple an inconvenient left government? Vested interests in greek assets like Piraeus? Shock and grab tactics?
Guardian staff I hate to think it's what you suggest. Sheer blind economic and institutional orthodoxy, I imagine, and a reluctance to concede they got it horrible wrong. Also (and very importantly) domestic political concerns: Merkel et al have their voters breathing down their necks ...
How would a "NO" vote strengthen the Greek government's position (compared to not having a referendum)?
Won't European leaders simply ignore it has no relevance to them (seeing that they are only accountable to their own voters)? And they clearly didn't appreciate it happening in the first place, so when they return to the table it will clearly be with even less good-will?
Guardian staff That's very possible. As things stand though, the Yes seems if anything to be edging ahead. Could be that a week of closed banks, cash withdrawal restrictions and collapsing consumption have seen No fervour start to fade a bit.
Something I'm curious about: the GBP is still used in Britain but do any other Eurozone countries still use their former currency? Why is it different for the Brits? Are Euros accepted in Britain?
Guardian staff The UK is not the eurozone. We decided not to join (thankfully). We are in the European Union. We, and Denmark, also have an opt-out from the obligation on EU members to commit to join the euro one day if they are not already in.
There may be one or two shops in the UK that accept euros – but not many.
Guardian staff Ah, there's a confusion here between European Union and eurozone. Britain is in the former (for the time being) but not in the latter, which is why it still has GBP.
How long can Greece keep up capital controls the same way they are now?
After the referendum negotiations will continue one way or another, but if there is a no vote, I see virtually no chance of the ECB raising ELA.
If it is a yes vote, a deal might be very much doable, so the ECB might get more accomodating...but if it is a no, and Tsipras doesn't want to leave the Euro, what then?
Guardian staff I spoke last night to the owner of a sizeable construction materials company active in several countries who said he could hold on for six weeks maximum. His staff are currently on enforced and possibly (depending on what happens) unpaid leave.
when will cash machines run dry? Has the government cunningly done its sums so that it will be just after, rather than before, the voting? Surely will be tuesday at the very latest?
Guardian staff Largely unnamed bank officials are suggesting the ATMs could run dry by Tuesday. They are already short of €20 notes, which is awkward because people are allowed to withdraw €60 a day. In practice some can only get €50.
Updated
We’ve got about 5 minutes to go - Nils and Jon are still answering your questions below the line:
A while ago people were saying that no legal mechanism exists for a member state to leave the EZ. Is that correct? If so, how long would it take to create such a mechanism?
Guardian staff Plenty of people seem to think you might actually have to leave the EU before you can leave the EZ. It's true there's no proper mechanism at the moment. Lord knows how long it would take (or what would happen to Greece in the meantime)
The IMF said yesterday that Greece will never pay off its debts and get back to "normality" without writeoffs and restructuring. Since none of that is in the referendum package, what is the incentive for anybody in Greece to vote Yes?
Guardian staff A eurogroup official might describe the incentive this way: a "yes" vote would trigger a general election. A new government might agree a reform package and be more trusted by Brussels/Berlin to implement it. In return, debt restructuring would follow.
When Syriza came to office it was wrongly believed grexit would soon follow. We were told by Angela Merkel et al that Greece could not leave or be expelled from the eurozone.the "mechanism" wasn't in place to allow this. What has changed if EU leadres are now sayning a no vote in Sunday's referendum would almost certainly force Greece out of the euro?
Guardian staff What is changed is the expiry of the second bailout programme. Greece currently can't fund itself in the financial markets; nor does it have support from creditors in the form of a support/bailout programme. It needs one or the other.
There still isn't a formal mechanism to expel a country from the euro. The process would happen on the ground. For example, a Greek government without access to euros could decide to pay public sector wages, pensions in the form of IOUs, essentially creating a second currency. In time, that currency might displace the euro, or be formally converted into drachmas or some such.
Is it really allowable to openly state that the referendum is about a different subject to what is actually on the ballot paper?
Guardian staff The government isn't doing that, it's saying it's about whether or not to accept the terms of the creditors (now withdrawn) proposal. Tsipras wants a strong No vote – which he's looking increasingly unlikely to get – to strengthen his negotiating position when he returns to the negotiating table in Brussels (if they'll have him)
What about Germany’s reaction?
Guardian contributor Hello Nils and Jon.
What do you think Germany's reaction would be in the event of a no vote?
Thanks.
Guardian staff The creditors clearly could choose to push Greece out of the euro. Indeed, having said that the referendum is a poll on euro membership, it would not be a surprise if they choose to do so. There is also the means - ECB support for Greek banks – accompanied by refusal to negotiate a third programme.
In practice, I dunno. A blank refusal to negotiate would not look good. The role of the IMF as a go-between could be crucial. Also, given the geopolitical angle, don't ignore the possibility of pressure from the US to get a deal done.
Mark Donovan wonders if there should be two questions:
Shouldn't there be two questions? The one asked, which remains relevant for understanding Greek opinion re what was on offer, and a second one re the desireto stay in the Eiro zone? That surely could bring clarity in a very muddy business?
Guardian staff Sensible suggestion. As things stand, lots of people here – and apparently in Brussels and the other European capitals – believe they are voting on whether or not to stay in the eurozone.
Chryso Poulli asks, is there a future for the EU?
Do you beleive there be a future for the EU. The generation between 14-40 in countries like spain, portugal, greece, cyprus and now france, have lived the austerity mesures in their lives imposed by the EU. It doesnt matter which governmnent you choose , the result is still the same... Do you beleive this generation beleives in the EU, or they now have come to hate the EU and the Euro, and in the first chance they will get they will choose to leave the EU?
Guardian staff That's a pretty big question. There is clearly growing anti-EU (or at least ambivalent) sentiment in almost every EU country now; you only have to look at the results of last summer's European elections. But polls seem to show it's not necessarily a generational thing; lots of young people are more pro-European than their parents. What is clear to me is that the generation that built the EU and knew what it was for – in other words, those that had experienced European war and occupation and all that went with it and wished to prevent it happening again – have left, or are leaving, the scene.
Won't a Yes or No vote simply result in the same "kicking the can down the road" scenario? A deal of any sort will simply result in severe austerity for the next decade if the IMF have their say. And that's besides exiting the eurozone.
I know the short-term hardship would be severe, but why not just return to the drachma, but stay within the EU? I believe the euro as a currency cannot continue and if Greece leaves the eurozone (and maybe the EU), contagion will spread within five years.
Guardian staff I think the fact that the IMF have now acknowledged that Greece needs another €50-60bn and its debts need fundamentally restructuring is very significant in what will happen next. It may have opened up a wedge between the creditors, pitting Lagarde against Merkel as it were ...
Why did the IMF wait till now to say that Greece's debt was unsustainable and another large debt haircut is needed, given that was precisely one of the key distinctive assertions of Tsipras' government?
Guardian staff It's an intriguing question. A few possibilities:
1. The IMF is embarrassed about its role in the 2010 flawed bailout. It should have insisted on a debt haircut then, in line with its normal behaviour.
2. It really believed that a debt haircut has only recently become necessary. That's what yesterday's communique says. "At the time of the last review in May 2014, public debt dynamics were considered to be sustainable but highly vulnerable."
3. It didn't trust Tsipras and wanted him to agree to reforms before throwing the haircut argument on the table formally.
I touched on some of this in today's paper: http://www.theguardian.com/business/nils-pratley-on-finance/2015/jul/02/imfs-late-confession-is-a-double-edged-blessing-for-alexis-tsipras
Since the referendum is possibly illegal, and certainly does not comply with European standards, and is asking a question about an outdated agreement (that has crossings out in it, made by hand - see pdf on referendum site), and is being interpreted in umpteen different ways - why cannot the question be made a simple YES for staying in Eurozone and NO to leave the Eurozone ? Everything else seems to be done on the fly - please give the people of Greece the chance to decide their future with an honest question that is not open to political misinformation.
Guardian staff Mainly because it's too late now ... Govt very keen to stress this is a vote on the proposals, whether they're still on the table or not, and not about Yes/No to eurozone. Indeed polls consistently show a large (though perhaps shrinking) majority of No voters want to remain in the eurozone. In a sense I think it doesn't really matter whether the ref is legitimate or not – providing he wins, Tsipras will take it simply as a kind of reinforced opinion poll to bolster his negotiating position.
Bally38 asks about one of Jon’s previous projects:
Back three years ago Jon Henley, in Greece, visited various citizens' initiatives to offer alternatives to cash.
What's happened to them now? Have they fallen by the wayside, or come into their own?
Guardian staff Glad you remember that project! Most are still going strong and some like Boroume have grown far bigger. The Potato Movement has grown into a whole Without Middleman Movement. It never ceases to astonish me each time I come here how much the Greeks are helping each other. I did a piece about al these solidarity health clinics, legal advice centres, soup kitchens etc in January
While InterestedAussie asks what effect this will have on the Euro on Monday:
What effect do you think this will have on the Euro on Monday? Will a "no" vote see it fall whilst a "yes" will see business as "usual" (whatever that is at the moment)?
Guardian staff Yes – that’s the best guess, though it’s hard to tell what probability the currency market is already attaching to a “yes” vote.
But I think we can say this: a big victory for “yes” would be positive for the euro on Monday because it is more likely to lead to a deal, even if that deal merely becomes another exercise in kicking the can down the road. A “no” vote generates more uncertainties.
Stefanosk27 asks:
Hi, I'm greek. I'm wondering: If the outcome of the referendum is NO (which means NO to the specific question our government asks us, concerning accepting or not the specific measures plan proposed by EU), what gives the right to EU to "translate" this NO as a NO to being part of the EU??? Who can possibly give them that right to misinterpret the outcome???
Guardian staff Fair point. But: the eurogroup’s stance is that, equally, there is no obligation on the credtors to offer a third bailout programme if Greece is unwilling to accept the final terms of the second bailout. Without a third bailout programme, there is the clear possibility that the European Central Bank could cut off liquidity to the Greek banks declearing them to be insolvent. Them’s the rules, the ECB could argue, and rules must be followed.
In practice, things might work differently. I suspect there would be an attempt to restart negotiations after a “no” vote, especially if the IMF is urging that course. But is is impossible to be certain.
SHappens asks:
Whatever the outcome of the referendum, it looks that it will likely be very close yes/no. With what is a stake (survival on the long run against slow death continuation), could riots form and could the army be called to restore order, and if so by who ? Whom does the army stand with?
Also how do older vs younger generation envisage an eventual return to the drachma, for the better or for the worth?
Guardian staff I don't think we're at the army stage quite yet ... My take is that things would remain calm at least for a while in the event of a No vote, in the sense that Tsipras would have a mandate to go an negotiate and the Yes supporters would wait to see what he came back with. A Yes vote is more problematic in that Varoufakis has already said he'll resign and Tsipras would presumably follow – so elections, and who deals with the institutions/bailout then?
In general older people who remember the drachma after the second world war are very reluctant to return to it.
Eric82 asks about the implications of Sunday’s referendum:
Seeing as it it may very well be a very close call between the yes and the no vote, won't the referendum on Sunday do more damage than good to Greek society? What if the no vote wins by only 51%? Surely that's not enough to have a strong democratic argument in the renegotiations?
Guardian staff This is an interesting question. The referendum question itself is odd – it is a vote on a proposal that the creditors say is no longer on the table. Most eurozone leaders, meanwhile, say it is actually a poll on whether Greeks want to be in the euro. So, in the event of a 51% victory for “no”, the losing “yes” side could be screaming about democratic illegitimacy if Greece was rapidly shuffled towards euro exit. One could understand their point of view. So, yes, I agree there could be severe consequences for Greek society. In the very short term, it is also easy to see how a close outcome could mean more delay in opening the banks.
Guardian staff It may well do. This is balanced on a knife edge - less than the pollsters margin of error separate the two camps at the moment – and the country is divided along some very old and bitter left-right fault lines. That’s one of the things most upsetting a lot of people here; the nation risks tearing itself apart, down to individual families. This past week I've heard the words “civil war” mentioned too often.
Thanks for joining us for today’s Q&A. Nils and Jon have begun answering your questions below the line. We’ll be dragging their answers into the live blog as we go.
On the referendum:
Is the government allowed to "take sides" and spend public money for campaigning for one of the two options?
Guardian staff Thanks Grishnakh. It certainly isn’t supposed to, but it is – though there’s arguably a distinction between what the government is doing and the Syriza party. It’s also worth bearing in mind that the Yes camp have a lot of money, a lot of support from the main busines and professional associations, and perhaps most importantly the backing of pretty much all the country’s commercial media including the main private TV channels. There’s some heavyweight proaganda flying around.
If it's the case that 90% of the money that's been lent to Greece has gone straight out again to pay its creditors, who's it gone to?
Guardian staff My colleague Phillip Inman wrote on this earlier the week. Link here: http://www.theguardian.com/world/2015/jun/29/where-did-the-greek-bailout-money-go
In short, the first Greek bailout in 2010 was primarily designed to save the creditors, especially eurozone banks. So soon after the banking crash, the eurozone was terrified of a fresh banking disaster. And, it should be said, the Greek government of the time wasn't too keen on a debt restructuring because it smelled humiliation. Sony Kapoor wrote a good piece here that includes some details;
Greeks will vote in a referendum on Sunday to decide whether the country will accept the latest offer by creditors.
The result could have far-reaching consequences for the future of Greece and its place within the eurozone. Prime minister Alexis Tsiperas has remained defiant, insisting he will only agree to tough new austerity measures if Greece is granted debt relief. Meanwhile, the IMF yesterday announced Greece needs €50bn (£35bn or $55bn) of extra funds over the next three years and large-scale debt relief to stabilise the economy.
With so much happening, it can be difficult to keep track of events in Greece. At 1pm today, we’ll have feature writer Jon Henley, who has spent months in Greece reporting on the crisis and is currently in Athens, and financial editor Nils Pratley here answering your questions about the Greek crisis.
Post your questions in the comments below and we will publish the answers in the live blog as they come in.
If "NO" wins is there anyone left at the table to negotiate with ? Do EZ leaders need a new mandate from their respective Gov's ? Does the IMF require payment of the default? Does the ECB negotiate bilaterally ?
If "Yes" wins is there anything to sign up to after the June 30th expiry ?? Can the bailout be quickly resurrected etc ? same as no really.