Thousands of jubilant Greeks poured into Athens' Syntagma Square on Sunday night and into Monday morning, after a decisive victory for the "no" vote in the country's referendum on a bailout proposal. The scenes of celebrations in Greece belie what is expected to be a tough road ahead, however, with the risk of a Greek exit from the eurozone and potential financial collapse very real possibilities.
The "no" side received over 61 percent of the vote in Sunday's referendum, outperforming expectations and giving Greek Prime Minister Alexis Tsipras strong popular support for his anti-austerity bargaining position with the country's creditors.
"I think, after the referendum, the Greek people are united in this situation. I don't want to lose the dream for a better Greece. I want to have hope for a better deal," Athens resident Nicky Zachary told The Associated Press on Monday.
But as Tsipras readies to give his proposals for a bailout deal to European leaders at a summit on Tuesday, it is unclear whether the referendum result will do much to change the hard-line stance of Greece's creditors who prior to the vote said a "no" result would mean a Greek exit from the eurozone.
Many of Europe's leaders were quick to condemn the outcome of the referendum, having campaigned during the week for a "yes" vote. Germany's vice chancellor, Sigmar Gabriel, said that with the "no" result Tsipras had "torn down the last bridges on which Greece and Europe could have moved towards a compromise." Jeroen Dijesselbloem, president of the body of ministers known as the Eurogroup, similarly called the result "very regrettable for the future of Greece."
Members of the so-called troika of creditors -- made up of the International Monetary Fund, European Commission and European Central Bank -- also issued brief statements. IMF Managing Director Christine Lagarde said her organization is "monitoring the situation closely and stand ready to assist Greece if requested to do so." The European Commission stated it "takes note of and respects the result of the referendum."
Hopes for a deal were lifted briefly on Monday, as Greek finance minister and perpetual eurozone irritant Yanis Varoufakis resigned. In a surprise development, Varoufakis posted a statement on his website in which he explained he had been "made aware of a certain preference by some Eurogroup participants, and assorted 'partners', for my... 'absence' from its meetings; an idea that the Prime Minister judged to be potentially helpful to him in reaching an agreement." He exited the finance ministry to swarms of media, before riding off on his motorcycle with his wife.
Varoufakis' aggressive negotiating style brought him into conflict with Greece's creditors. Before the referendum, he notably accused the troika and Brussels of terrorism.
Economist and lead bailout negotiator Euclid Tsakalotos will now take over as finance minister, presenting eurozone partners with a potentially more palatable figure to attempt an agreement.
Greece remains in a very precarious financial position, desperately in need of bailout funds to pay off billions in debt and keep its banks solvent. The nation is reliant on emergency funds from the ECB, which at current rates might not be enough to keep banks and ATMs running out of euros. If the ECB were to decide to cut off these funds, Greece would imminently go bankrupt.
Greece's banks will remain closed and capital controls will be kept in place until at least Wednesday, despite initial plans for the institutions to reopen Tuesday. These measures have limited ATM withdrawals to 60 euros a day and caused desperation among many Greeks, especially elderly pensioners who don't own debit cards.
Some Greeks fear that the calm reaction to the controls won't last forever. "I'm afraid this quiet situation will become very anxious and dangerous," George Papadokostakis, a 34-year-old coffee shop owner in Athens, told The Associated Press.
The country still owes billions in debts, and a 1.6 billion euro payment deadline to the IMF came and went last Tuesday. Further payments to the ECB are due this month, and there's an upcoming payday for public sector workers that will put stress on Greece's coffers.
If Greece runs out of cash or cannot pay these debts, it will very likely have to leave the eurozone and return to the drachma or another form of currency. Such a move would heavily devalue Greece's money against the euro, and potentially cause public backlash against Tsipras and his left-wing Syriza government.
Tsipras faces a difficult negotiating position as Greece now likely needs even more money from creditors than it did before capital controls, an economic analyst told The New York Times. An IMF report on Thursday also said Greece will need 50 billion euro more than previously forecasted over the next three years to get its economy back on track.
European leaders do want to preserve the integrity of the eurozone, but observers say there is concern that capitulating to Greece could set a bad precedent for other nations in Europe who also want relief on their debt.
Many major banks are predicting that an agreement on a new bailout program won't be reached. After the vote on Sunday, a slew of financial institutions changed their forecasts to indicate that a Greek exit from the eurozone is now the most likely scenario.
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