The Greek people have rejected further austerity measures demanded by the IMF, EU and European commission. If nothing else this was a brave move as the country now faces the real possibility that their banking system could collapse. 61% of Greeks supported the government and voted no to further austerity.

The ball is now back firmly in the court of the troika and they will now have to decide if Greece can stay in the monetary Union. More pressing the ECB faces an immediate decision over whether to continue freezing emergency liquidity assistance to the Greek banks. If Greek banks cannot tap further funding they run the risk of running out of money and potential bankruptcy.

If further funding is denied government officials have confirmed they are considering drastic steps to ensure the solvency of the banking system. If needed the Greek government will issue IOU’s in electronic form to pay their bills in the short term.

European stock markets are down sharply this morning with the FTSE opening 1% lower. Despite the Greek financial system imploding gold is down to £748.35 per ounce during early trading.