Projections for a “haircut” of Greek bank accounts vary between 27 to 55 percent if the ECB requests a return of roughly 120 billion euros funneled to Greek systemic banks as liquidity.

Such a nightmare scenario could be one of the repercussions of a possible delay in any new bailout agreement, regardless of a “yes” or “no” vote in Sunday referendum.

If the vote is “no” on Sunday, one danger is the continued closure of Greek banks, with a four-day deadline given by the ECB for a return of its money — as was the case in Cyprus. Additionally, as one can image, there would be a complete breakdown in public, private and commercial transactions, both internally and abroad.
Essentially, Greece would be without a banking system.

If, conversely, a “yes” vote is recorded and the government doesn’t resign immediately or call a snap election, after a month or so, it will head to Europe to request a new bailout program. If elections are called a caretaker government would assume power, and probably have the right to seek a temporary funding deal with creditors. Whether such an agreement is possible is unknown.

If and when a new government is elected, whatever its composition, a new (third) bailout program is imperative and necessary, one expected to include numerous reforms and … loans. Whether its better or worse than previous proposals remains to be seen, what’s certain at present is that the Greek economy has experienced an unexpected shock on top of still muddling through a recession.