What is actually being voted on in the Greek referendum?

Europe’s leaders say the Greek referendum is a vote on the euro. But Athens insists it is just about one specific offer. Matthew Partridge explains what's going on.


The Greek referendum question is complicated and longwinded, but voters understand the issues

Europe's leaders say that Sunday's Greek referendum is a de facto vote on the euro. But Athens insists that it is just about one specific offer. Meanwhile, the ballot paper itself is causing confusion, says Matthew Partridge.

What's going on?

The Greek government has said that refusal will not necessarily lead to Greece's ejection from the euro. Instead, they argue that the Troika (ECB, IMF and the European Commission) will simply have to offer another deal. The Greek finance minister has insisted that Greece cannot leave, threatening to use legal action to delay any attempts to force it to do so.

In response, virtually all eurozone leaders, including those in Italy and Spain, have warned that a no vote would lead to Greece quitting the Euro.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Who's right?

However, if Greece was ejected from the euro it would lose any influence it has over the ECB, without gaining the ability to set interest rates or print money itself. Even if Greece was able to remain within the system, the ECB could shut down Greece's banking system by refusing to extend any more liquidity assistance. Even with existing capital controls in place, Greek banks would only remain solvent for five days.

And the ballot paper?

That's a heck of a mouthful, which is one of the criticisms levelled at the ballot paper. The other is thedecision to put the "No" option above the "Yes" option, which is seen as an attempt to influence voters.

Are these criticisms justifed?

But Katie Ghose, the chief executive of the UK's Electoral Reform Society, says that "the UK's 1998 Good Friday Agreement referendum question was notoriously complex, but people knew the underlying choice". If the Greek government had proposed a simpler question it would be criticised for not being precise enough.

That said, the complexity of the question also leaves the resultwhatever the outcome looking a lot lessclean-cutand open to interpretation by the Greek government than perhaps the rest of Europe would like.

Dr Matthew Partridge

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri