Greece Flag

Sunday, July 5, 02:45 p.m.

Greece’s European Austerity Referendum went down in flames Sunday night.

The measure was overwhelmingly rejected by Greek voters.

The move throws into flux the valuation of the Euro, and in a strange way gives Greece some leverage against EU lenders, International Monetary Fund (IMF) and European Central Bank (ECB), who hold pretty much all of some €3o0,000,000,000 in Greece debt.

I think the Europeans will want to try and recover some of their money rather than a big fat zero. So expect a new deal containing debt relief.

The only type of deal that could work would be to shave off 20-25% of the outstanding debt and extend out more favorable repayment terms. Otherwise Greece can just say thank you, walk away and pay nothing. Then the country would revert back to the drachma.

Something that other financially-teetering countries like Italy, Spain and Portugal will be closely watching.

Expect overreaction in the markets, then euphoria over a sealed deal.

The euro will definitely feel some pressure in international currency markets until an agreement between Athens and Brussels is reached.

But the long-running drama is getting little over-dramatized and not-to-mention taxing.