Greece is voting on whether it wants to accept the European lenders' proposals for reform, which they must do if they are going to receive any more emergency aid.
Greek prime minister Alexis Tsipras was elected for his anti-austerity view – he stands against cuts
This is his big test of the Greek people to see if they still stand with him against the EC, the ECB and the IMF.
If they do agree with Tsipras that Greece should stand firm against austerity
Tsipras has said it will mean they have a stronger bargaining position against the lenders.
But naysayers have warned that it could mean the Greek banking system collapses
This would mean Greece may have to leave the euro and re-establish its own currency in order to stabilise its economy.
That would have very serious consequence for the global economy – which is itself getting over a financial crisis – and the euro.
It might even be more expensive for everyone to let Greece leave.
European leaders have said that even if there is a no vote, Greece might not exit the Eurozone – basically they don’t want Greece to, because then the project will have failed.
If there is a yes vote, Yanis Varoufakis, has said that the Greek government will keep its word and accept the lenders’ proposals.
However he said it would not be easy for many ministers to accept this – declaring that he will resign.
He also said he would rather cut his arm off than sign a deal without debt relief – a signal that Greece is looking for some of its debts to be written off.
Talks will resume either way after the vote – at the moment the lenders are refusing to negotiate until they know the results.Reuse content