War of nerves over the referendum in Greece

The week to come will be marked by a war of nerves over the referendum in Greece, scheduled for next Sunday. The left-wing Greek government is building up pressure by suggesting to the Greek voters to reject the creditors' demands.

The other euro members react by also applying pressure. The ECB today decided to freeze Emergency Liquidity Assistance (ELA) for Greek banks. Thus, the ECB is forcing capital controls and limits on withdrawals. 

Only the result of the referendum will finally decide on Greece's EMU membership. Should the electorate vote in favor of a compromise, the Eurozone members will not be able to ignore that and will resume negotiations.