Greece 'No' Vote Creates Huge Crisis for Europe's Leaders

At the Guardian UK, "Greek referendum no vote signals huge challenge to eurozone leaders":

Monday's Guardian front page: Greek voters defy Europe #tomorrowspaperstoday #greekreferendum #BBCPapers pic.twitter.com/7hoc4e1py3

— Nick Sutton (@suttonnick) July 5, 2015

Victory by Syriza party of 60% to 40% in polarising referendum presents nightmare for eurozone elites, particularly Germany’s Angela Merkel.

Greece delivered a landslide no vote to the eurozone’s terms for the country remaining in the single currency on Sunday night, unleashing a seismic political shift that could derail the European project. The verdict confronts the EU’s leadership with one of its most severe ­crises of confidence and leaves Greece facing potential financial collapse and exit from the euro.

In a polarising referendum called by the radical leftist government of Alexis Tsipras at only eight days notice, Greeks voted by more than 60% to 40% in support of the prime minister, spurning the extra austerity demanded mainly by Germany and the International Monetary Fund in return for an extension of bailout funds.

Tsipras said that Greece “has proved that democracy cannot be blackmailed; Greece has made a brave choice and one which will change the debate in Europe....

In a televised address on Sunday night, Yanis Varoufakis, the Greek finance minister, said the no vote was a rejection of the “iron cage” of the eurozone. “Today’s no is a big yes to democratic Europe. A no to a vision of the eurozone as a boundless iron cage for its people. From tomorrow, Europe, whose heart tonight beats in Greece, starts healing its wounds, our wounds.”

The sweeping victory for Tsipras, who challenged the might of Germany, France, Italy and the rest of the eurozone, represented a nightmare for the mainstream elites of the EU. With Greek banks closed, withdrawals limited, capital controls in place and the country rapidly running out of cash, emergency action will be needed almost immediately to stem the likelihood of a banking collapse. But it is not clear whether the European Central Bank will maintain a liquidity lifeline to Greece and whether the creditor governments of the eurozone will sanction instant moves to salvage Greece’s crashing financial system...