Updated on July 5, 2015 4:57 pm
On Sunday, Greek citizens took to the polls in a controversial referendum asking them whether they support a plan calling for continued economic austerity in exchange for debt relief. Their answer—with more than 70 percent of the votes counted—was a resounding “no.” The outcome means that next steps for the nation, which has fallen into arrears with the IMF and imposed capital controls to prevent a run on the banks, is largely uncertain. According to reports from Reuters, the country may next attempt to secure financing by asking for more emergency funding from the European Central Bank.
The referendum—which had asked Greeks to vote “yes” or “no” on a proposal from Eurogroup leaders to extend financing to the deeply indebted country— was called for by Greek Prime Minister Alexis Tsipras amid meetings of euro zone leaders trying to come up with a deal to allow the country to avoid default. The call for the referendum effectively ended those discussions.
Opponents of the most recent Eurogroup proposal felt that the austerity measures put forth by the group’s leaders—which would have included tax hikes, pension cuts, and reductions in government jobs—were overly harsh and punitive, and would hurt Greeks more than help them. The proposal also didn’t include sufficient provisions for writing down Greece’s debt—an omission that some critics, including Finance Minister Yanis Varoufakis, believed would leave the country in shambles for generations. Varoufakis said that he would “rather cut off [his] arm” than sign a deal that extends or intensifies the country’s debt. He had planned to quit if the country voted in favor of the deal.