Here's all we need to know about the difference between voting "όχι" or "ναί" on the referendum in Greece: a "no" vote means, in the words of the current prime minister, "I can assure you that the next day, I will be in Brussels and there will be a deal;" a "yes" vote means that the next day the replacement prime minister will be promising to go to Brussels and secure a deal.
Meanwhile, the poor, literally, Greek people-- the working poor, the unemployed poor, the pensioned poor, the unpensioned poor, the urban poor, the rural poor-- should, no matter which way the vote goes, say hello to their little friend... Cyprus.
The Greek banks require capitalization. Capitalization means money. It can come from "equity" arrangement; it can from debt issuance; and/or it can come from seizing the money that actually belongs to somebody else, that somebody else being the depositors. Clearly, nobody is going to subscribe to an offering of stock in the Greek banks. Just as clearly, the Greek banks cannot issue debt in the capital markets, and the Greek government requires its own recapitalization in the form of issuing short-term notes to the Greek banks in exchange for euros.
No recapitalization of the Greek banks, which are tied hand foot to the ECB system, will be forthcoming without there first being a bail-in, a seizure of a portion of the deposits that the banks supposedly hold in trust, a trust guaranteed by...well not by the ECB since the monetary union is nowhere near that unified, but rather by the Greek government.
Given that government's deliberate delay in imposing capital controls. the big account holders, with the big money, have already moved significant portions of their funds outside the jurisdiction of the government. That leaves....everybody else. That leaves maybe 10 million (I'm guessing) or so people whose individual accounts average (and I'm merely guessing) €13,000 who are about to get a haircut by Jack the Ripper that will take the average account size down to about €9000. How's that for sticking it to the IMF, the ECB, the European Commission?
Some people call that a haircut. Some people call the referendum "democracy." Democracy is when "no" and "yes" mean the same thing.
The "no" that matters is the "no" to Syriza's deluded pretensions at "negotiatons." The "no" that matters is the "no" to Syriza's delusions of actually being a government. The "no" that matters is the "yes" to repudiating the debt in its entirety.
July 5, 2015