Officially, today's referendum in Greece asks whether to accept a European bailout proposal from the European Commission, the European Central Bank, and the International Monetary Fund (collectively known as the Troika). But it was really about broader questions about Greece's economic future, and whether that future would be in the European club or outside of it.
The final results in the Greek referendum hasn't been announced yet, but all signs are pointing toward a likely "no" result. Here are five ways that result could shape the future of Greece and the European project.
1) "No" means more austerity in the short run, possibly less in the long run
Greece's left-wing government claims that a "no" vote will strengthen its hand and help it get a better deal from European creditors. They assume that the Eurozone's leaders really don't want Greece to leave, so if Greece calls their bluff the Troika will fold.
But hardly anyone outside of Greece believes that, because Greece has a lot less leverage than in previous rounds of negotiations. European governments have bought up Greek debts that were previously in the hands of European banks, making it less likely that a Greek default will trigger a continent-wide financial crisis.
So it's more likely that negotiations with European authorities will collapse, and Greece will have to choose between even more drastic spending cuts or defaulting on its debts.
On the other hand, if a no vote triggers a departure from the Eurozone, which many people expect, then the Greek government could finance more government spending by printing its own currency.
Many liberals, including Paul Krugman, believe that the Troika has made a mistake by pushing for more and more austerity in return for bailout money. These arguments parallel the ones they made during the 2009 stimulus debate in the United States: that spending cuts are ultimately self-defeating, since they lead to lower economic activity and ultimately less tax revenue. So in Krugman's view, it would be a good thing if Greek struck out on its own and used newly-printed drachmas to prop up its welfare state.
But many on the right have the opposite view. They point out that even after recent cuts, Greece has one of the most expensive pension systems in the Eurozone. They've argued that making government benefits less generous will help Greece in the long run by leaving more room for private entrepreneurship. On this view, a "no" vote represents a missed opportunity.
2) A "no" vote means Greece is likely to exit the Eurozone
Many Greek voters want to reject the Troika's offer but still stay in the Eurozone. But Eurozone leaders probably won't allow that. Without help from the Troika, Greece will be unable to pay its debts. And if Greece defaults, the European Central Bank may cut ties to Greek banks, effectively forcing Greece out.
But leaving the Eurozone might actually be good for the Greek economy, at least in the long run.
Greece's dire situation is partly due to the high debt the country had at the start of the 2008 financial crisis. But it's also due to a severe depression that has dragged on since that time. The economic slump has reduced the size of the Greek economy by around 30 percent, which is a big part of the reason Greece's debt-to-GDP ratio has grown from 107 percent in 2008 to 177 percent today.
If Greece had its own currency, the Greek central bank would engage in aggressive monetary easing to boost economic growth and bring down its 26 percent unemployment rate. But Greece shares a currency with countries like Germany and Austria that are currently enjoying low unemployment rates. So the European Central Bank hasn't done enough to support the Greek economy.
And this may not be a one-time problem. Economic downturns will happen at different times and with different severity in the various European countries. The euro's one-size-fits-all model will make it impossible to provide each European country with an optimal monetary policy.
So leaving the Eurozone will give Greece more power over its economic destiny. However, it would also have some high short-term costs. Greeks who owe euros to foreign creditors will suddenly find it a lot harder to pay off these debts with depreciated euros. And there would be months of chaos as the Greek authorities overhaul the nation's financial system and print new currency.
Also, it's possible that future crises won't be as bad as this one. "I think it's an open question on the extent to which this particular crisis was unusual," says Scott Sumner, a monetary policy expert at the Mercatus Center at George Mason University. Sumner argues that monetary policy in the Eurozone has been too tight across the board, with inflation falling well below the ECB's 2 percent inflation target. With better management, the ECB could have done more to boost the Greek economy without triggering substantial inflation in healthier economies.
Yet even if that's true, it's not necessarily an argument for staying in the euro, since the ECB could botch the next economic crisis as badly as it did this one.
3) A "no" vote will make the Greek financial crisis worse
Since Greek prime minister Alexis Tsipras announced his referendum a little more than a week ago, the Greek banking system has been on life support. Greeks have been rushing to pull their money out of Greek banks, which forced the government to institute a €60 limit on daily ATM withdrawals. But that merely delays the time until the country's banks run out of money — it can't save the banking system from collapsing.
The Greek banks have stayed afloat for as long as they have because the European Central Bank has extended funds through a program called Emergency Liquidity Assistance. But the ECB has refused to say if it would continue extending this lifeline in the event of a "no" vote. If not, it could have dire consequences for the Greek banking system.
Then there's the problem of Greek debts. Greece has a €3.5 billion debt payment due to the ECB on July 20. Even if the Greek banking system limps along until July 20, missing a payment to the ECB could trigger a financial crisis.
Leaving the Eurozone could help with some of these problems, but it would make others worse. For example, some Greek people owe debts denominated in euros to overseas creditors. If Greece forcibly converts euros in domestic banks into drachmas, those drachmas are likely to plunge in value, suddenly making it a lot harder for Greek people to pay off their foreign debts with depreciated money.
4) A "no" vote means Syriza is more likely to stay in power — for now
As a practical matter, the Greek referendum was a referendum on the country's government under Tsipras and his Syriza party. Tsipras and his ministers have been urging Greek voters to vote no, and his finance minister, Yanis Varoufakis, vowed to resign if a majority votes yes.
A yes vote would have likely caused Tsipras's left-wing government to fall, triggering new elections.
If projections of a "no" vote prove accurate, it will strengthen Syriza's hold on power — at least in the short term. Tsipras will feel comfortable taking a hard line in subsequent negotiations with European creditors. In practice, that means that negotiations are likely to break down completely, forcing Tsipras to take desperate measures such as defaulting on Greek debts or exiting the Eurozone.
The big question is whether the Syriza government can ride out this turmoil. For months, the Syriza government has been assuring Greek voters that taking a hard line in negotiations with European creditors won't endanger Greece's membership in the Eurozone. If those assurances prove to be wrong, as many economists believe they are, Syriza might face a backlash.
5) A "no" vote is a blow to the European political project
Last week, Vox's Zack Beauchamp made the argument that the case for the euro actually has nothing to do with economics. Rather, the euro is part of a broader plan to integrate Europe politically to help ensure there will never again be a war between major European powers such as France and Germany.
On this view, the economics of the euro are almost beside the point. Having French people and Germans use the same currency helps to create a sense of solidarity. And periodic economic crises could actually prove helpful in the long run, by convincing Europeans to accelerate the creation of institutions — like a continent-wide banking system and fiscal policy — that will help to prevent the kinds of problems the euro is creating today.
If a "no" vote leads to Greek exit from the Eurozone, that will be a blow to the European project.
But that doesn't necessarily mean that it would be a mistake for Greece to leave the Eurozone. Greece's current political situation, with unemployment above 25 percent, is awful. The political benefits of European unity might just not be worth inflicting this degree of suffering on the Greek people.
Also, while the euro in general might be producing major political benefits, it's not clear that Greek membership is crucial to the currency's success. Five years of bailouts has produced bad blood between Greeks and Germans that will take years to overcome. And there's no reason to worry that an independent Greece would launch a war against its Northern neighbors. So letting Greece go might strengthen the European project more than going to heroic lengths to keep them in.
The European Union might eventually evolve into a United States of Europe, as Vox's Dylan Matthews has suggested, but Greece is now unlikely to be part of it.