The Complete Greek Referendum Walk-Thru: When, How, What To Expect; And What Comes Next

The Greece’s referendum, due to take place on Sunday, remains an open question with pollsters and analysts alike. Polls have shown mixed results in favor of the “yes” or “no” vote to austerity commitments needed in return for aid.

Whatever the result, most analysts agree the impact on Greece’s govt, the country’s banks and the markets is uncertain at  best and the country’s fate in the euro still at risk

S&P says the probability Greece will exit the euro zone has increased to about 50% following the govt’s decision to hold a vote.

And since there is enough confusion as is, the following summary from Bloomberg answers most of the unknowns associated with Sunday's popular vote:

WHEN ARE RESULTS DUE

• Polling stations will be open from 7am to 7pm local time and the result may be known before midnight
• Pollsters haven’t confirmed if there will be exit polls; if there are any, they will come immediately after the polls close
• Software distributor SinglularLogic, which has been hired to run the vote counting and data processing, should be able to provide an estimation of the winner a few hours after polls close
• JPMorgan expects ~90% of votes will have been counted by midnight, based on past general elections in Greece; vote counting could be even faster this time as it’s a yes or no question

WHAT ARE GREEKS BEING ASKED TO VOTE ON

• The question, underlying documents and process have been released here:http://www.ypes.gr/el/Elections/referendum2015/
• “Greek people are hereby asked to decide whether they accept a draft agreement document submitted by the European Commission, the European Central Bank and the International Monetary Fund, at the Eurogroup meeting held on June 25 and which consists of two documents”
• The government has been at pains to tell voters that  this isn’t a vote on euro membership but a vote on the terms of any bailout agreement
• Greek Prime Minister Alexis Tsipras says he’ll sign a deal on Monday either with “yes” or “no” vote; not an option for Greece to leave euro
• Finance Minister Varoufakis told Bloomberg TV it’s about “how to stay in euro” that he would resign if people vote “yes”
• European officials have criticized the government for asking people to vote on a deal that is no longer on the table after the country’s bailout expired on Tuesday; don’t agree that “no” vote will facilitate Greek government’s negotiating position

WHAT DO THE POLLS SHOW

• Opinion polls are mixed so far with a poll commissioned by Bloomberg News showing 43% intend to vote “no” and 42.5% backing a “yes” while 14.5% remain undecided; survey was conducted by the University of Macedonia Research Institute
• An Alco survey for Ethnos Poll shows the “no” vote with 43.4% and “yes” vote with 44.8%
• A ProRata poll earlier in the week said the “no” vote led while a GPO survey found 47.1% support for the “yes” campaign
• Analysts for the most part still expect the “yes” to win out although JPMorgan says the initial polls surprised them, making an already uncertain outcome alittle more uncertain
• Citigroup expects a “yes” vote but say public opinion will likely remain highly fluid and subject to events such as official statements and the degree of social unrest, if any
• Eurasia says risk of a “no” vote is quite high at around 45% though still expect a “yes”

WHAT IF IT’S YES

• If there is a yes vote, outcomes are ultimately likely to prove stabilizing but could remain chaotic for some time, JPMorgan says
• Base case is Tsipras stands down and a national unity government is formed under technocratic leadership
• Forming a new government won’t be easy, BoFAML says;  parties supporting “yes” camp hold only 106 seats; that suggest 45 MPs from the current govt would have to jump ship for a government to be formed
• There are also technical issues about whether or not general elections could be organized in the middle of the summer, suggesting the country may be in limbo for at least a few more weeks
• Citigroup analysts say securing a deal with creditors on Monday will be easier said than done, and negotiations could drag on for weeks, challenging efforts to reopen the banks
• A ‘yes’ vote, followed closely by the resignation of Tsipras and Varoufakis is likely to be the most market-friendly outcome, Goldman Sachs analysts say

WHAT IF IT’S NO

• Greek PM Alexis Tsipras said yday a “no” vote is decisive step toward a better deal, not a vote to leave the euro
• Former Greek PM Kostas Karamanlis says a “no” vote on Sunday would lead to Greece’s expulsion from heart of Europe
• A ‘no’’ vote would probably require a political intervention unlike any we’ve seen as yet to row back from Greek euro exit, JPM says
• The dynamics of increasing banking and payments dysfunction would shorten the timescale for such an intervention to a handful of weeks at most
• BofAML says wouldn’t expect the creditors to change their proposal; without new official funding, Greece will enter uncharted territory
• Risk is Greek bank holiday lasts well beyond next Monday, BBH says; on a “no” vote, it’s clear the ECB would not increase ELA

HOW WILL MARKETS REACT

• If the result is a “yes”, European equities are thought to be the asset class with most attractive risk reward, Barclays says
• A “yes” vote should boost risk appetite and give investors more confidence that the Fed will hike rates later this year, Credit Agricole says
• Expect USD to be among the main beneficiaries under this outcome; any relief rally in euro should be short-lived
• A “no” vote will be a risk-negative outcome that will fuel Grexit fears; euro should fall, especially against the majors and market visibility will worsen significantly
• It could take months before we know the ultimate fate of Greece; if hopes of a deal remain alive, markets may even return to their holding pattern after the initial sharp selloff