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Brexit versus Grexit: Why you might call a referendum and then reject its outcome

Pastor, Lubos, (2016), “Brexit versus Grexit: Why you might call a referendum and then reject its outcome”, Voxeu, 4 Ιουλίου

Britain voted for Brexit, but many seek ways to avoid it. This draws comparison with the events of almost exactly a year ago when the Greek government ignored the outcome of the Greek bailout referendum. This column argues that the Greek government hoped the result would crash the EU’s stock markets and thus strengthen its bargaining power. When this failed to materialise, the government ignored the plebiscite and signed the bailout extension. In the Brexit case, the observed market drops do not qualify as a collapse and so the referendum’s outcome is likely to be implemented.

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