This happens when a Greek no – Business World

On Sunday, the Greeks are voting yes or no to the international lenders’ support package. How it goes since Bloomberg tried to sort out.

Sunday’s referendum is the first announced by a left government in Greece. It is about a yes or no to that already dismissed the negotiating draft from the lenders EU, ECB and IMF come up with.

But what happens on the Monday when stock markets reopen after the weekend? There is of course no one knows in the current situation but Bloomberg has nonetheless put together a couple of scenarios for the election aftershocks.

Scenario 1:

The Greeks are voting yes and a third package of aid can be paid out within weeks. As both the Greek Prime Minister Alexis Tsipras and Finance Minister Yanis Varoufakis promised to resign if it is yes, can the country be forced to form a new government. Alternatively, a new elections are coming.

Scenario 2:

The Greeks vote no in line with Alexis Tsipras will. Even if it does not teach Greece leave the euro overnight. Rather than waiting three to four weeks with increasing pressure on Greece to start printing money in the old currency drachme that the country had until the introduction of the euro in 2002. Now wait even a number of legal procedures to find a solution for a Greek exit from the euro. Bloomberg predicts that the new Greek currency trading at a substantial discount against the euro and the Greek purchasing power initially fall by 30-40 percent. The case can be quickly expanded, while the prices of goods in the country increases and inflation. If Greece is lucky, the new currency reaching an equilibrium after a few months.

A no leads but not necessarily to the ECB withdraws their support money with immediate effect. Monetary Fund, the IMF, could also give Greece an additional period of 30 days of the loan that matured on 30 June. This may in turn lead to further negotiations on a future emergency loans to the southern European crisis country.

In a no standing Greece also face a number of financial obstacles, which include the repayment of loans to the IMF. Especially hard it can be when on July 20, when Greece has to repay around 3.5 billion euros in bond redemptions of securities held by the ECB.

It is also possible that the Greek economy will end up in free fall and may need a new rescue package, after all, writes Bloomberg.

How should investors act then?

– In this mode you should keep to the so-called safe havens, the ie government bonds in safe countries such as Sweden, Norway and the USA, and safe currencies such as the dollar, interest rate strategist says Pär Magnusson business world.