Tonight, it is still not clear how the Greek situation will be resolved. The European Central Bank–which is desperate to avoid being dragged into the politics of this situation–has chosen a middle way on its emergency assistance to Greek banks. It has neither ended it—which would have crashed the whole Greek banking system—nor extended it, which would have enabled the banks to stay open and eased the pressure on the Syriza-led government. Greek banks will definitely be closed tomorrow and probably until the referendum on Sunday.
The next big question is what happens on Tuesday when the bailout programme ends and a payment comes due to the IMF which Athens will not be able to make. It is worth remembering, though, that there is no mechanism for a country leaving the single currency.
If Greece does end up being forced out of or quitting the Euro, which is more likely now than it has ever been, the rest of the European Union will be far too distracted to pay much attention to the British renegotiation. But both the Eurozone and the EU would have to respond to a Greek exit in ways that would profoundly change the way that they work. For that reason, Cameron should restart the whole renegotiation process if a Grexit does occur.
Comments