European Commission Vice-President Valdis Dombrovskis said Monday in a press conference that Greece would remain part of Europe while also questioning the legality of Sunday's referendum that saw a majority of Greek voters reject an international aid deal that would have brought new austerity measures, reported the Telegraph in London. The referendum was "neither legally nor factually correct," Dombrovskis said.
Greeks were asked Sunday to support an EU bailout deal that would grant the debt-stricken country money in exchange for spending cuts. But the bailout deal had expired on June 30, prompting some to question the legality of the vote. Europe’s top human rights body, the Council of Europe, also said the vote fell short of international standards because it was called at such short notice.
Dombrovskis said Greece must now come up with credible reforms to address its debt. He said Greece's "no" vote "unfortunately widens the gap between Greece and other eurozone countries" but said he was confident the eurozone would remain strong in the aftermath of the referendum, the Associated Press reported. "We have all the tools necessary to ensure the financial stability of the euro area," Dombrovskis told reporters in Brussels.
Meanwhile, Stephanie Flanders, a market strategist at JP Morgan, said Monday that it is more likely than ever that Greece will leave the currency zone. She writes: "With this “no” vote we have moved firmly onto the Grexit side of the decision tree, with a messy Greek exit now more likely than not. We can expect this to cause volatility and sell-offs in European markets and potentially very serious long-term political implications for Europe."
She added: "A Greek exit from the Euro would be costly to Europe’s taxpayers."
British Prime Minister David Cameron, who has been critical of the European Union, declined Monday to say whether Greece should stay in the eurozone. His official spokeswoman said: "He thinks that clearly Greece and the Eurozone need to sit down and talk through the implications of the result. They need to find a sustainable solution. It is a matter for Greece and Eurozone partners."