Greece rejects austerity

Nearly 150 protesters rallied in the streets of Athens Monday just hours after the Greeks voted resoundingly to reject more austerity measures in exchange for another bailout from the country’s international lenders.

The triumph of the No camp in the Greek referendum means Athens will possibly default on its debt and run out of money because the European Central Bank will not lend the country any more cash. It will leave the EU, re-adopt its old currency, the drachma, according to a Barclays analysis.

Police said between 100 and 150 anarchist protesters had started throwing firebombs at riot police and setting trash cans on fire in the central Athens neighborhood of Exarcheia.

This is far from the place where celebrations are taking place by supporters of the “no” vote in Sunday’s referendum.

There was no indication that the violence was connected to the political campaigns involved in the vote.

The results of Sunday’s referendum — 61 percent voted “no,” compared with 39 percent for “yes” — left the country’s future in the European Union and its euro currency in tatters.

A total of 6.16 million Greeks voted in Sunday’s referendum, or 62.5 percent of eligible voters. The poll needed a minimum 40 percent turnout to be valid.

According to analysts, if Greece adopted national currency, it would automatically abandon the euro area.

The ECB is scheduled to meet tomorrow morning to decide on emergency liquidity assistance (ELA) policy. An outright suspension would effectively put the banking system into immediate resolution and would be a step closer to Eurozone exit.

All outstanding Greek bank ELA liquidity (and hence deposits) would become immediately due and payable to the Bank of Greece.

The maintenance of ELA at the existing level is the most likely outcome, at least until the European political reaction has materialized. This will in any case materially increase the pressure on the economy in coming days.