mark: a new day in athens and a new dawn for europe. voters overwhelmingly rejected further austerity demanded by creditors. grexit fears, an early flight to safety sees the euro slide. the market moves to moderate as investors wait to see how europe's politicians respond. anna: merkel heading to paris. she will meet francois hollande to map out a way forward for greece. china supports. the shanghai composite gains on measures to shore up the

equities market. ♪ anna: a warm welcome to countdown. i am anna edwards. reporter: and i am guy johnson from the greek capital. anna: let's get you up to speed on what is been happening. let's talk about what has been going on. we will start with the euro. this is the last three days. lower at the start of the asian session as the foreign exchange market picked up. we dipped below 110 and came up in the hours that followed moving a little higher. that initial flight to safety in a number of asset classes, definitely present but

moderating a little bit. looking at some of the other asset classes, you can see that as well. look at what happened to the yen. again, flight to safety but moderating a little as we get into our stride on this monday morning. how long will any calmness last in the london session? we will have to see. we may see that flight to safety resume. the treasury yield, another expression of the flight to safety trade this morning. yield coming down on ten-year treasuries, but those moves have held. 2.4% on friday, 2.2 percent now. those early morning flights

holding as i speak. let's get you up to speed with what is happening in greece. let's get some perspective from the ground. greeks backed alexis tsipras and voted against austerity measures demanded by creditors in a referendum over the weekend. the economy staggers towards collapse. the future in the euro is unclear. guy johnson is on the ground in athens. hans nichols is an berlin. caroline conan joins us from brussels. what is the mood? a new dawn for the greek people? guy: it was celebration last night. 60-40 roughly, the vote. we did not think it would be the result we got. a very strong show of support for alexis tsipras. he was out last week containing.

the ground game seems to have paid off. he was on television every other night, making sure the greek people went his way. big question, how will creditors respond? we will hear more on that in a moment. but alexis tsipras said last night that was a priority. >> our immediate priority is expedia's reopening -- expedi ous we opening of the banks. guy: those fears that creditors will steer themselves clear despite a deal, it is unclear whether or not that will happen. yanis varoufakis was talking about the fact he would rather cut his arm off then sign a deal

that did not include debt restructuring. he said the greeks cannot carry on kicking the can down the road. >> on the 25th of january greece said no to five years of hypocrisy, that lies that the deficit could be overcome. the greeks were called to pay with blood sweat tears. as will their grandchildren. guy: alexis tsipras is incredibly popular and greece. this was a referendum on his leadership and he does stand up at this point in time to the greek people. let's only questions need to be answered. we do not have a program, do not have a deal, a functioning banking system. the economy is flat on its back. what can he do to change that? he made it clear to the greek people this was not a referendum

on eu membership. that is what creditors thought it was. how do we bridge the gap between creditors and the greeks? that remains to be seen. it will be a long and interesting week. anna: we will be back to guy shortly. hans, creditors wanted the vote to be about something else. they are on schedule to me tonight. ? ? what do they expect? hans: angela merkel and francois hollande said the will of the voters be respected. but what you have heard is that the votes on the rights of other european citizens also need to be respected. it is that tension and conflict between syriza and the democratic outcome that has sent some of the finance ministers to the table negotiating. that is where we have the source of tension. even among those in germany that have been sympathetic towards alexis tsipras, his desire to

have a debt restructuring some of the harshest comments last night came from them. have a look at what the vice chancellor of the minority party -- his comments were as blistering as some of merkel's closest advisers. he said alexis tsipras has torn down the last bridges across which europe and greece could have moved towards compromise. he went on to say the negotiations are difficult to imagine. there is a meeting between madame merkel and francois hollande tonight. on tuesday, there will be a eurogroup meeting in brussels. most of the attention will be on what happens at the european central bank, what they do with emergency liquidity assistance. be heard from the chairwoman of

the federal bank of greece. she was talking about cash machines running out about as soon as today. it will be a banking question first with political issues. anna: on the political front, we know what the greeks will be asking for. they want the debt forgiven. but what would have to happen for germany to approve a new aid program? hans: you would have to vote in parliament, and they are on recess until september 7. the same sequencing applies. you need a vote in athens and a vote after to call them back. a lot of the talk in germany is no longer on financial assistance. it is a humanitarian package what you do to alleviate the humanitarian crisis in greece. nothing about keeping them in

the eurozone. anna: caroline in brussels, we have heard from francois hollande and angela merkel about respecting the results of the referendum. but how have leaders in brussels been reacting to the surprise? caroline: it is a victory for the government alexis tsipras and seen as a failure in brussels for eurozone leaders. all 18 members of the euro area had urged a yes vote. they said before the referendum a no vote would make it complicated to negotiate and could pave the way to an exit. the leaders we heard from say they respect the greek people but now expect alexis tsipras to really explain how he is

planning to stabilize his country now. we heard from a few of them including the eurogroup had who said the result is regrettable for greece, for recovery of the greek economy. reforms are inevitable. all eyes will be on brussels tomorrow night. eu leaders meeting here at 6:00 p.m. it will be a very long night. the french president and german chancellor will map out tonight in paris how things will be negotiated. they want greece back at the negotiating table. the parliament president said anova would not necessarily mean a better deal for greece. >> the greek people said no. 18 members of the euro agreed

about the proposals to which the greek people said no. democratic governments in other country have a different view. it is up to the greek government to make proposals which could convince the 18 member states in brussels that it is possible and effective to renegotiate. caroline: the main problem is that political trust has been broken. the results of the summit tomorrow will depend on how quickly trust can be rebuilt to really produce anything tomorrow. anna: caroline, thank you. now let's talk about what is happening in asian markets.

they are dealing with all the fallout in the early stages. they have the chinese story to deal with. china's stocks have pared gains around weekend news. david ingles brings us up to date with what markets have been reacting to. david: good morning. we are about 12 minutes past noon in asia. we did highlight that we are looking at two different stories. everywhere else, because of we woke up to in greece difficult session. sell first, ask questions later. we are at halftime right now. we saw a lot of losses accelerate from the region. we are at levels of last march.

3.3% drop in japan a $69 billion wipeout. hang seng, down 3.2%. hang seng composite down almost 4%. this follows a week of busy announcements. it gets more interesting in the afternoon sessions. we just have to wait and see what happens. not the best start to the week. a lot of equity money going to fixed income. anna: david, thank you. an update from hong kong. let's get more on the greek story. initial reaction. let's bring in stephen gallo of fx strategy. give us your initial reaction to

what has to be a surprise result. >> also the degree to which the greeks voted in favor of no 61%. grexit risk has increased. we are dealing with the symptoms of grexit up to this point and we are now faced with a looming possibility. the market reaction is understandable. now, we are just waiting to see what shape negotiations take between greece and creditors. if negotiations take shape to begin with, and what shape. we are in a state of limbo, waiting to see what happens. anna: we will more from stephen in a moment. we will take a short break and get more on we come back. coming up, we will be back in

athens, bringing you reaction on the ground as greece votes note to the austerity proposed by creditors. these are pictures from greece. we will be back in just a few minutes. ♪

anna: welcome back. 18 minutes past 5:00 in london. greece has voted overwhelmingly to reject further austerity measures demanded by creditors. 61% said no to more spending cuts and tax increases that were the conditions of a new bailout. alexis tsipras described the results as a great victory and said he would return to the negotiating table with a strengthened hand. angela merkel will head to paris

today to talk with french president francois hollande about the outcome of the referendum. they held a call last night and decided the decision of the greek people is to be respected. there is a summit of european leaders scheduled for tomorrow. they will wait to offer proposals according to a european government official. the european bank governing council will meet this week to discuss a new lifeline to greece. they have been closed after capital controls were imposed. mario draghi will have a conference call with the eurogroup president this morning. china's benchmark shanghai composite has made gains on fresh measures to shore up the battered equity market. the country suspended initial public offerings.

the central bank says it will provide liquidity for margin trading. let's get back out to athens. guy johnson is standing by with reaction. guy: thank you very much. we have a financial analyst in athens. good morning. alexis tsipras says the next priority is getting the banking system open. will he be able to do that this week? >> no. first of all, you need an agreement. that will take some time. we have been five months back-and-forth with no agreement. even if they do it questions remain as far as the banking system. there is very little collateral in the system for operations to

be conducted. even under an agreement situation they have to pull a rabbit out of the hat. guy: what happens if no rabbits appear out of any hats? >> i am not sure. it is uncharted territory, to be honest. no one has an idea what is going to happen. the ecb says they will figure out a way to keep banking systems liquid, but i'm not sure how they will do it. guy: will that be a make or break thing? we need to find a way to put the greeks and creditors on the same page. >> that is the key to everything going forward. guy: what was last night about? what did the greeks vote for? >> i have no idea. it amazed me last night, these results. i thought it would be 50-50 or

very close. nobody imagined a 60-40 split. guy: a lot of people running businesses voted no. a lot of people with a big stake in the economy that voted no. everybody thought it was the pensioners, but it was beyond that. >> it must have been beyond that. there is no other explanation. again, i am not sure exactly what was on everybody's mind. whether it was yes or no does not matter. the measures that need to be taken, the agreement that will be signed, it will be along the same lines, whether it was yes or no. guy: alexis tsipras is incredibly popular. there's no one else in the political landscape with that connection. how do we end up -- nobody

supported the yes campaign. where does the alternative view come from? >> that is a good question. i do not know. honestly, i do not know. i think, if the situation continues, and we see more blood and tears -- guy: they may be to come. >> people are continuing with their lives, thinking nothing will happen or everything that has happened is no big deal. once we enter a situation where we have more blood and tears i think that is when a lot of people will reconsider the situation. but that has not happened. guy: george, thank you very much indeed. financial analyst here in greece. it is amazing. the banking system remains shut.

until it opens, it is difficult to get a gauge on how the story will finish. back to you. anna: guy johnson in athens. stephen gallo, head of fx strategy at bmo. some really dumbfounded confusion in terms of financial commentary in greece. a lot of people not understanding what has been taking place. you have completely changed your base case and what happens with the euro. >> 60% no on a legislative grexit in the not-too-distant future, which basically means the difference on debt sustainability, the gap between creditors and greece, is too wide to bridge. even though they are close on reform, debt sustainability is an issue. negotiations had nowhere. the ecb does not provide

additional support. some script begins to circulate alongside the euro. we are inching towards grexit. anna: you do not think we see a change of heart from creditors as a result? >> at the moment, we think there is a 30% 35% probability that happens, that they get somewhere on debt sustainability. debt sustainability for creditors is in our view, a leap of faith at this stage. we will put this on the table some form of restructuring or debt forgiveness. that is basically where we are at. anna: if your scenario, a managed grexit, were to transpire, where does that leave the euro? in the moment at the markets

the day after the greeks vote of no, the euro is below 110. but we have not seen mass panic. where does this leave the eurozone? >> inching towards grexit means there is further downsizing of the euro. the eurozone adjust to the fact that re-denomination risk is no longer zero. there has to be further adjustment. having said that, we think the euro does not go below parity. even if it does go below par this year because of the account surplus. it means greece is becoming less dependent on foreign funding. if there's less foreign funding and less foreign capital, we run into a crisis. i will quickly get a word in a long-term issues. in the longer run, grexit mean

risk will adjust to a larger degree. anna: stephen, thank you. stay with us from bmo. when we come back, more from athens. ♪

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anna: welcome back to "countdown ." this is a special update on the greek crisis. let's check in on the markets as we get a gauge of how markets will react to the surprise vote in the greek referendum. greeks voting no to further austerity. this is how the euro is reacting. we saw an initial move towards perceived safe haven assets, a picture of the euro is having to deal with.

we saw it go below 110 but bounce back a little bit. we will see if the moves are sustained as a london traders wake up. let's look at other typical risk scenarios and see how we are trading elsewhere. the yen, below 121.80. treasuries, we held on to risk aversion trading around treasuries markets. we did see yields moving significantly lower. 2.4% on friday down to 2.28%. the greek no giving a boost to treasuries. here are the stories you need to know. greece voted overwhelmingly to reject further austerity demanded by creditors. 61% of voters said no to spending cuts and tax increases that were conditions of a

bailout. people were in central athens, waving greek flags last night. alexis tsipras says he will return to the negotiating table with a strengthened hand. francois hollande and angela merkel head to paris for talks about the outcome of the referendum. the leaders held a call last night deciding the will of the greek people is to be respected. further euro area governments are waiting for greece to offer proposals to stay in the eurozone. secretary of state john kerry has tempered expectations of an imminent nuclear deal with i wrong after nine days of talks -- iran after nine days of talks. tomorrow, and interim deal is due to explore -- expire.

it would allow tehran back into global energy markets once sanctions are lifted. let's get back out to the greek capital. guy johnson is there. guy? guy: thank you very much. a win for the no yesterday. we thought it would be 50-50 and turned out 60-40 in favor. we are talking to the president of the chamber of commerce, and he is trying to foster the other view. good morning. >> good morning. guy: yesterday was a surprise to many people. the strength of the no camp caught people off guard. why was it such a big result? >> the perception of the greek

people, alexis tsipras said he would have an agreement. varoufakis has confirmed there was a draft presented to him but would not reveal the text of the draft. here we are in front of premises that have to become true. we expect the prime minister to do so. otherwise, he will have a mass reaction in the parliament. guy: he can go out there and make claims because nobody is on the other side of the chamber pushing back. there was no strong yes voice no leadership making the yes case. why is it that alexis tsipras is

so popular and no one else is standing up? >> alexis tsipras is promising everything to the greek people. he is a young man, promising politician. at the same time i believe he is following a path that is not good for the company. today's political activity is a bad thing. we will see the consequences of this. what we expect is to see the banks opening. prime minister citrus -- tsipras has promised they will open after tomorrow. this is impossible because the banks lack liquidity. also the capital controls. the problem is there and nothing is moving in the country for five months. guy: what has happened in the last week? talking to colleagues, what are they telling to? -- you? >> imports have been stopped.

there is no commercial activity. consumption is in relation to supermarkets and nothing more. people are concerned they will not have necessary means to leave the next day. all these are bad signs of a situation expected to deteriorate. this is really what we are concerned for. guy: how does the story unfold from here? we do not have an agreement in place extra money coming into the banking system. we are waiting to see if pensioners will be paid. when you look at the next few weeks in front of you and think about how the greek economy will operate, what do you see happening? >> political crisis. i'm afraid we will have social unrest in the sense the governor

-- government will not be in a position to deliver. the banks being closed down. perhaps they will have problems as to whether they will be in a position to remain as operating banks or not. we will see surprises in the sector too. these are bad signs. guy: it is hard to see at this point in time. alexis tsipras is stunningly popular. he called a referendum, said vote no, was on television last night. syriza back tim. -- backed him. he is hard to defeat. >> he has to deliver the results of his promises. the moment he is not in a decision to do that he will face that clash. guy: he says this is being

created by outside forces. >> for five months, they are negotiating on the basis of no plan. there was no plan from the beginning from this government. they are responsible for the situation. five months without political activity, without any development on a real plan which would combine fiscal measures and growth. so this is a major issue. if it continues like this, the reaction will be absolutely negative. guy: thank you very much. the president of the american chamber in commerce in greece. back to you. anna: guy johnson in athens. stephen gallo, head of fx at

bmo. we understand the governing council is going to meet. what do you think they are going to do with emergency liquidity assistance? >> i think they wait to see what happens in the political sphere before they do anything significant. i cannot see them raising the ela but i cannot see them decreasing it either. anna: without a move by the ecb, greek banking sectors are closed. >> the comments that the banks will open earlier, i cannot see that happening. anna: where does this leave us for the euro, though? you talked about that there has to be more re-denomination risk around the periphery. >> we do not want re-domination risk. there could be as a result of greece. i think going forward while the balance sheet effects a grexit and as opposed to rampant contagion, you see stable

contagion, but over the longer run, our view is the euro becomes a harder currency. any euro denominated asset, they will say there is a region nomination risk. every time there is a political economic crisis in some part of the bloc the risk premier will be bigger. anna: this is not grexit yet though? is this as bad as grexit looks in terms of how low the euro goes? >> i did not say that. i think things get worse before they get better if we inch towards full-scale grexit. but effectively, the market is gradually, step-by-step the gaps lower in the euro that we

have seen for two weeks in a row , that is effectively the fx market pricing in grexit. we will see a response later today. anna: he will get another gauge as to whether the grexit looks like pricing in the collapse of lehman. >> i alluded to this earlier -- the eurozone is becoming the next creditor to the rest of the world. the investment of the eurozone in the next three or four quarters will turn positive. it means the eurozone is less dependent on foreign financing. because form capital can leave anytime there is a problem with the eurozone. that supports the euro. it is not foreign investors buying the euro despite the crisis. it is that dynamic with the balance of payments that means

the euro cannot fall sharply from these types of issues. but going forward, a higher currency means the more cautious investors like central banks, will buy less euros. anna: the likes of the chinese central banks that have talked about diversifying fx holdings? >> they will think twice before increasing the shares of euros once grexit occurs. anna: that's what an exit door looks like. slightly riskier. >> it has to be. you can sever an atrophying part of the body to get rid of the hand but you are still without a hand. in the eurozone case, there is no prosthetic. you cannot replace greece.

you cannot replace the mentality of foreign investors. you cannot do something to make up for that. once it is no longer zero, it is no longer zero unless we really fast track and move closer to some fiscal union, including eurobonds. anna: it becomes more united. >> solidifying the rest of it once greece leaves. but that is a huge hurdle. anna: we have a lot to learn about this. stephen, thank you so much. stephen gallo, european head of fx at bmo. coming up initial public offerings suspended in china with chileans of dollars in stock value wiped away. $3.2 trillion in a few weeks. what has been happening in china over the weekend after a short break. ♪

anna: welcome back to "countdown ." it is 5:46 in london. let's check in on market reactions after 61% of greeks voted no to austerity rules that would have brought more relief from creditors. this is the euro over the last three days. you can see the move lower, the risk aversion trade. that is what we have seen over the last 24 hours. but things have stabilized a little bit. the euro below the 110 level against the dollar but has been stabilizing around 110.30. whether that holds into the london trading day as we were discussing whether there is a little bit more risk around the

euro more re-to domination risk, we will wait and see. other trades that's seeing flight to safety the yen gaining in the early trading day. treasuries have held onto risk aversion trade a little better. we saw the no vote giving a boost to treasury yields dropping 2.28% on the u.s. tenure. greece has voted overwhelmingly to reject further austerity measures demanded by creditors. 61% said no to more tax increases that were conditions of a new bailout deal. prime minister alexis tsipras describes the results as a great victory and would return to the negotiating table with a strengthened hand.

angela merkel heads to paris for talks with francois hollande over the outcome of the greek referendum. they held a call last night and agreed the decision of the greek people is to be respected. with an emergency summit called for tomorrow, fellow euro area governments are waiting for greece to offer a proposal to stay in the single currency, according to a european government official. the central bank governing council will discuss extending a new lifeline to greek lenders. the country's banks have been closed after capital controls were imposed. mario draghi will hold a conference call with the european commission president and of the eurozone president this morning. in china, the shanghai composite has made gains over fresh measures to shore up the equities market. over the weekend, the country suspended ipo's while brokerages pledge to buy shares. and the central bank will extend

liquidity for margin trading. it is the latest effort to stem the slide the worker will -- worlds second-biggest stock market. some remarkable steps being taken to prop up the market. it has worked in the last 12 hours or so, i guess. >> just some remarkable moves we have seen over the weekend. suspension of ipo's china's biggest brokerages pledging 100 billion yuan to market stabilization. and the central bank pledging support for margin finance. monumental moves to support the mainland market. perhaps more remarkable has been limited impact we have seen in the market so far today.

the shanghai index popped at the open and has subsequently given up early gains, up 2% at lunchtime. the shenzhen is down. anna: some fascinating analysis that suggested the chinese were taken -- taking a page out of the 1929 wall st playbook. what is the motivation? is this about supporting the stock market or are their broader implications and concerns for the government in beijing? >> i think china's policymakers this is more than gains and losses of investment in the equity market. the concern is that the equity market provided a prop to the recovery in the first half of the year. it boosted consumer confidence, made it easier for firms to raise funds to invest.

now with the market corrected those effects will swing and reverse. consumer confidence will take a hit. equity fundraising will take a hit. the signs of recovery we saw on the chinese economy in the second quarter may well be snuffed out. those concerns are pushing the aggressive attempts by china's policymakers to put a floor under the falling market. anna: thank you tom. bloomberg's chief asia economist from beijing. let's get further analysis of the great situation. charlie, we talked just moments ago to stephen gallo at bmo. he says their base case has changed. 60% probability of a grexit. managed grexit. but that is what they're going for. how much do the events change your view? >> it is clearly a radical shift

in the political establishment in greece. it believes it has a mandate to renegotiate with a stronger hand in the eurozone. fine. it is a nice concept. but the eurozone thought it was going as far as it could have gone anyway. all you have really done is move what was a political impasse within greece, the trade-off between what they were elected as a mandate to do and what was required to agree it has just become a direct conflict between greek parliament and the greek population and the european parliament. does that increase the risk of a grexit? of course it does. i still would not say it is the most likely scenario, largely because this is about politics. not necessarily economics. anna: if it is about politics,

could creditors choose to have a change of heart or mind whichever is appropriate, and allow more conversation about reducing the debt burden on greece? that is clearly the sticking point. >> i mean, that has to happen at some point. even the imf report that was released last week suggested you needed a write-down of greek government. it points to the fact that it is not sustainable at current levels. the problem is, what are the moral hazard associated with that? if a country hold a referendum and says we do not want her -- more austerity they do not have to obey the same rules as everyone else. that is going to scare the living daylights out of

principle policies in spain. anna: given the report last week, do you think it would be incorrect to talk about this being imf-imposed austerity? is this eurozone leaders the german view, the view of periphery countries that have imposed austerity? is that where the more hard-line stances coming from? >> i think so, and understandably. if you are someone playing by rules and someone plays by a nicer set of rules you will not necessarily be happy about that. that is the big race going forward. there is too much of a shift from the europeans. that sets a dangerous precedent and endangers the whole project without a much more significant shift towards the union stephen mentioned earlier. that would remove the repricing

of risk, the nonzero risk. if you have a transfer union that removes the risk with respect to the euro in the eurozone. but at the moment the tide is the other way. anna: that is the optimist view if greece leaves and unites the rest of europe they put in place infrastructure and set up a transfer union. >> that is the ideal outcome, shall we say. that is a fully operational union. anna: we will see where we go. charlie diebel head of macro strategy. 5:56 in london. coming up in the next hour, we are live run athens brussels, frankfurt, and berlin after

greeks voted no to demands of further austerity. what does this mean? how will creditors react? how will the ecb react? we will be back in a couple of minutes. ♪

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>> the results today do not have wins or loses it is a great trial on its own. an episode and modern european history. >> a new day in app and the new dawn for europe. there were celebrations pretty greece faces an uncertain future. they are formally rejected further austerity measures demanded by creditors. grexit fears and equity flied in treasury.

they wait to see how we are politicians will respond. >> the german chancellor will meet with the french president to figure out a way forward for greece. and shanghai gains a government measures in the equities markets . >> welcome to countdown. welcome to athens. i'm guy johnson. >> i'm anna edwards. a warm welcome to the second hour of the program this morning. let's get straight to market reaction for that surprise no vote viewed 61% voting against those austerity conditions that would have guaranteed more support from creditors. this is the response we saw. we had seen a flight to safety and safer assets. that hasn't been entirely the

story this morning. euro down below 110. it is bounced a little bit. the initial flight to safety has been moderated a little bit. we take a look at what is happening in the yen trade. with some moves where it could begin in gaining and thing shifted a bit. treasury market hung on to their flight trade a little bit pit we saw the greek no boosting treasuries. yield came down a little bit. 2.4% is where it was on friday. we have seen a move as a result of the greek story. let's get a picture on that response from all over europe. greeks have voted against austerity measures demanded by

european creditors in yesterday's referendum. with an economy staggering towards collapse a future in the euro is now unclear. guy johnson is in athens. carolyn is in brussels. guy what is the mood there? greeks are getting into their stride after a resounding no to the conditions put forward by the creditors. guy: certainly their celebrations last night. behind me, the square was packed. everyone rejoicing at the no vote. this morning, a number of challenges. he is -- has convinced the greek people he is taking them down the right path. now he has to deliver. he has to deliver a reopening of the financial system. >> our immediate priority is the

speedy is reopening of the banks forced financial -- for financial stability. guy: he has also got to do a deal with the creditors. we will get another take on the start. but he has made it clear he has made a strong mandate to go back to the creditors and negotiate . there is no deal here if it doesn't involved restructurings. he will not sign a deal that involves kicking the can down the road. >> greeks said no to the lies that the deficit could be overcome with new austerity

alone. guy: greece there promising a lot -- they are promising a lot and have to deliver. they have won the trust of the greek people. can they earn the trust of the greek people? how will creditors respond? the answer that all of greece wants. anna: how have you been react in? -- how have leaders been reacting? caroline: of course they all wanted the yes vote. the know what would make it complicated for greece. that tells you how difficult it

will be tomorrow. the eu leaders will meet at 6 p.m. we are expecting a long night. this might even be the hardest summit that the european union and the eurozone have ever faced. the result of the greek referendum was regrettable but the recovery of the greek economy difficult measures will have to be decided upon -- difficult measures and reforms are inevitable. i/o druggie and the eu group -- mario draghi and the eu group -- it doesn't necessarily mean a better deal for the greeks. >> the greek people said no.

18 of the members of the eurozone agree of the proposes to wish the greek people said no. but democracy in greece a democratic government had another view, a different view. it is up to the greek government to make proposals which could convince they can other member states of the euro. it is necessary and effective to renegotiate. caroline: they're difficult -- very difficult. trust has been broken. as it was put last night the big government has set to protect the people.

another creditors will seek to protect their interest in the interest of europe. anna: thank you so much. the meeting is today. they have decision-making to do. paul: very reluctantly. you heard him saying ecb will understand the decision the greek people have made. mario has over said iraqi banks afloat while the politicians make the decisions. in -- he will keep the banks afloat while the politicians make the decisions. the greek banking system is liquid and we're back to square one on negotiations. it will be a difficult decision. the ecb may decide now is not the time it cannot be far off.

a very difficult call tonight. anna: thank you very much. guy johnson in athens. more as we go through the program. thank you to all of our correspondence. let's turn to our guest. we have these various meetings taking place. meanwhile, the greek banking sector remains closed. how long? >> that is the real pressure cooker. you just saw the greek prime minister and the banks must reopen said. but the europeans are going to be reluctant to unless they have some kind of sign we are playing nicely again. that is not likely to be

immediate. that -- maybe there's some sort of minor lifeline thrown to very gradual increase, but is still sticks with the banks affectively and capital control. it cannot be long before some sort of -- anna: indeed. if we see a parallel currency will it decide a lot of things? you're not a lot to issue another current it within the eurozone. if you did that would put further distance between athens and the rest of europe. charles: all of these problems can be made to go away. but this comes back to the fact we have someone come a country that believes it has a mandate to do something different from what 18 other countries have signed up to. this is any movable force -- unstoppable object.

i don't know how it will pan out. it will be interesting to hear what they have to say. i suspect that they're going to say we're willing to talk. i don't think he really want to get the message that they will give in easily. anna: i haven't heard many people saying this changes everything. it creditors will have a big reading. charles: i don't see how they can. greece dictating european policy? i think we could get the start of a very long and painful negotiation. that is if we have enough time. anna: the possibility of another currency. thank you. 11 minutes past 6:00.

coming up, initial public offerings have been suspended in china. more than 3.2 chilean dollars worth of value -- $3.2 trillion worth of value. that story after a short rate. ♪

anna: welcome back to "countdown." all over europe they are reacting. let's check in on how markets are reacting to the shocked no vote why the greek people. a sturdy measures would have delivered relief from creditors. the big fall is when asian markets got involved in the euro reacted negatively. 110 level. it bouncing a bit in the trading day.

we have seen it move lower again. perhaps it is not the best expression. it trades more broadly. let's recap where we are on those. we have seen the yen getting a boost. trying to fly to safety. now we are around the 122 level. things unwound a little bit. the treasure markets are clinging to their safety trade. the greek no vote boosted treasuries. 2.8% is the yield on the 10 year. 2.4% on friday. bond markets we'll have a look

to see how they are reacting to the weekend developments. here of the stars you need to know this morning. greece has voted overwhelmingly to further reject austerity measures demanded by creditors. there were conditions of a new bailout deal you have raised the greek flags. they call it a great victory. german chancellor will be speaking with french president hollande. an emergency summit of european leaders called for tomorrow. euro governments are prepared to wait to offer proposals for the country to stay in the single currency. that is according to a european government official.

they will discuss linda a new lifeline. ecb president draghi will hold a conference call later this morning. let's head now to asia where there are plenty being suggested. they are dealing with the news out of china that there would be an extension of ipos and the brokers would help the government to track to support the equity markets. things are moving around so quickly. it seems the chinese markets have raised all of the gains they were making earlier in the session. >> we actually fell as much as half 1%. we are on the way back down. certainly things do get very interesting.

what time is it right now? a quarter past 1 p.m. it is really at this time when it gets really interesting. you have a lot of these measures announced. you have brokers coming in. they will support the market. where are we now? this good be changing. we were making a joke here. one of the measures they could taken is to shorten the trading days to about 20 seconds. everything could of gone downhill. up about a fifth of 1%. this is also where a lot of people are expecting them to come in and buy these blue chips. perhaps we might see those

remain limited. the big banks are here. yet the biggest -- what is that? oil distributor in china. the blue chips are still up. we will see how this pans out. i believe the regional benchmark is down the most since february. singapore is down 8/10 of 1%. hong kong, down over 4%. that is the worst we are looking at right now. as you mentioned, let me -- ticket look at the bond yields.

down two or three basis points? there we go. we are down about one. look at the big move. it is a big move. as much as 15 basis points. that is the story here. back to you. anna: thank you. david ingles in hong kong. it is a tight race in the greek referendum. the strong novo is little surprise to the greek ministers former college professor. >> no means we are getting out of the eurozone, which is

completely wrong. they are supporting them all the time. they are terrorizing that people. i have known him for about 18 years. he has been a student of mine. he was already a special student. very intelligent. smart student. the people that are to blame by these people of the european union and the imf. i have been here all day. i think the no vote, you will get at least 54%.

i just wanted to tell you we have counted percentage of the votes. it is 69%. anna: let's get back to charles. we were saying it was interesting that angela merkel and -- we haven't heard back from the creditors yet. how will they respond? a decision of the greek people must be respected. >> absolutely. given the opinion polls in greece it is massively skewed

towards staying in the euro. to get 62% no on austerity, it is not particularly surprising results. but the european angle has been they were voting on european leadership. there's not going to be a fairly awkward conversation of we want to redo the deal and the europeans will say that you just said you don't want to agree to our terms. >> is interesting how relationships could be restored. i wasn't too long ago that they were blackmailing -- threatening them a blackmailing the government. >> exactly. it is hard to see how the way back -- it is certainly not

going to be smooth. it is the time frames. your cart to remember there's a huge economic cost from all this. anna: the clock is ticking talking in the background. you could see how this conversation could last for years. but it can't. charles: it cannot. i think the big shift came from the europeans when -- when greece to the referendum last weekend. something of a shift in the thinking of that europeans. we cannot do it anymore. we cannot negotiate with these people. now if they come back and say i'm empowered and i won't have

it come a negotiation with you again how -- anna: how do investors respond to this situation? charles: it is hard to say. it depends on the outcomes. it will trade poorly i think for a while. perhaps they are most vulnerable. they have seen such strong inflows over the past few months. look for those areas that have been most inflated as a result and maybe they are the one to are most at risk. anna: thank you. 6:26 a.m. in london.

coming up, we will be joined by another voice on the greek story. reactions to the greek referendum result is coming up next. ♪

anna: welcome back to "countdown." 8:30 a.m. if you're watching in athens. let's take a look at what has been happening on the markets. let's talk about what we are seeing. call it what you will get people trying to find safer havens on the day after the greeks voted no in this referendum. this is the move we have seen in the euro. things bouncing a little bit and moved lower again. we are not all that much lower compared to last night.

we are now around110.33 110.32. let's look at other safe haven plays. the japanese yen typically gained at times like this. you could see that unwinding a little bit the japanese session. let's remind ourselves of what has been happening in the asian market days. we have seen a number of things that the asian markets had to deal with. really reacting to the greek story. it bounced a lot higher than that. it is considerably lower. we saw a great deal of selling. chinese authorities took action to try to stem those losses in the chinese stock markets.

let's get back to her the risk aversion trade is taking us. we have seen the greeks of voting no in this referendum and yield coming down. 2.7% is where we find ourselves this morning. some of our correspondents are talking about how the lines at the atms are longer this morning than they were before the votes. here are the stories you need to know. greece has voted overwhelmingly to reject further austerity measures as demanded by creditors. there were conditions of a new bailout deal. they were waving greek flags. returning to the negotiating table.

and talks with french president along over the outcome of the referendum. the two leaders held a call last night. the decision of the greek people is to be respected. they're preparing a way for greece to offer proposals to stay in the single currency. u.s. secretary of state john kerry has expectations of an imminent include deal after a ninth straight day of talks. progress is being made. until the satisfies the u.s. over iran's nuclear program once sanctions are lifted. let's get more on the latest greek news. the vote against further austerity measures has left the owners caught european leaders

to determine what the next move would be. what are you hearing? >> he's leaving the finance ministry today. maybe we will get a little bit more about that. it may get a little bit easier to get to yes for creditors and greece. what you have seen is an emboldened greek government. they think they have a mandate behind them. we clearly have breaking news. anna: absolutely. thank you. caroline hyde is in studio with us. let's come to you on this. caroline: we have a tweet from the finance minister himself. he is a minister no more.

and after the announcement of the referendum results, he was made aware of a certain preference by some euro group and assorted partners that was absent from the meetings. judged to be potentially helpful and to reach an agreement. is set for this reason i'm leaving the finance ministry today. in terms of market reaction i've got the euro here. currently not reacting much at all. remaining steady. we will see what the political reaction is. back to you. >> thank you very much did interesting developments.

great to see you. it what do you make of this latest development? he said he would do that in there were a yes vote. >> ims surprised. -- i am surprised. there are two key challenges. agree on a new program dealing with a much worse economic situation. the conditions are very likely to be tougher than the proposal in the referendum. they need to repay $3.5 billion to the ecb on july 20. either they disagreed with what is likely to be included in this

program or allow the greek government to have a new beginning. the next few weeks will be very difficult. anna: somebody believes that the creditors are opening at least a conversation? we haven't heard much from the creditors side. this is tell us how open they are? >> i think they will be open to negotiate. greece is still a euro zone member. what they were discussing before they were still assuming positive growth. but they were discussing before did not great new capital for the banks. and most likely they'll need to accept some kind of debt relief.

these negotiations will be tough. it will be very difficult. it will be a challenge. there are reports that greek banks may run out of cash. anna: that seems like a crunch well before then. now that the banking sectors closed and they're suggesting it is days before things deteriorate much more rapidly for the great banking sector. how long do we have to get some kind of lines of a deal? >> we need some progress soon to allow them to -- the ecb needs to have a program on the table. that is extremely important.

otherwise we will not just be concerned about the economy, but -- anna: are we at the point where the greek government must be thinking the how is going to pay its people, start putting a stamp on all of its euro notes and turning it into a parallel currency? are we at that point? if the greeks good old rope road, is any way back from that? >> we're talking about an economy without banks or new cash coming in cannot survive for long. they have to start thinking about this. it makes it even more difficult. anna: watching this with your unique insight on top of your fx

strategy hot, how do you look back at the negotiations that lead up to this point? have we seen compromise on both sides? that is still the issue for the greek government. they remained one all the way up to last week. >> both sides not really compromised. they were not willing to accept debt relief. the greek government were not willing to really meant -- lament reforms. anna: isn't that what this is

supposed to be about. it had a ready been pledged. >> this was the philosophy of the program. the europeans did not deliver on their promise. we are at a juncture. otherwise the grexit -- anna: real reforms that the greek people have voted no to reject. >> you cannot do it otherwise. product market reforms. it would support economic growth looking forward. anna: stay with us from bank of america merrill lynch.

guy johnson is in greece. he said that he be leaving it there was a -- guy: it turns out that he was going to leave either way. there were rumors he would likely go either way up there some sort of deal done that he would step down. he talks about wearing it with pride. i think he is leaving with his head held high. whether or not this is the concession in order to try and ease the deal that he hopes he could negotiate in brussels, we will wait and see. there was a colorful five months

he had a reputation for lecturing his peers. that didn't go down particularly well. but yeah, maybe he knew that he was going to be stepping aside regardless of the outcome. maybe a no vote as well. anna: may be. he did say he was going to stay regardless of the outcome. we will see if we can track him down. guy johnson in accents. after the rejection of austerity, we look ahead to the start of the european bond market trading day. will they see signs of nervousness around the european bond markets as we look for further responses from the creditors. what will they say? 6:43 a.m. in london.

♪

anna: welcome back to "countdown." read the stories you need to know. greece voted to reject further a stored he there's demanded by creditors. tax increases are conditioned of a new deal. people filled out the square in central athens waving greek flags. they said it was a great victory. german chancellor angela merkel will head to paris to talk with french president francois hollande over the outcome of the greek referendum. the two great leaders held a call last night. the low euro area governments preparing to wait for greece to offer proposals to the country's to stay in the single currency.

the european central bank council will meet today to discuss extending a new lifeline to greek lenders. the ecb president mario draghi will hold a conference call with europeans commission president and your group presidents -- eurogroup president the greek finance minister is stepping down. let's get back out to guy johnson. guy? guy: let's get a political reaction to that decision. nice to see you. they for joining us on this hot morning. your reaction to this? >> everybody wanted someone that would say the same thing two

days in a row did i think that this could help to reach an agreement. the light -- guy: everything will be ok? >> everything will be ok. there has to be the need to have an agreement. everybody should compromise. guy: were you surprised that over 60% voted no? >> now. the understood the questions. they voted against the previous governments. we have a strong answer. the premise are clarified -- this is quite important.

a percentage would not have voted to leave the eurozone. guy: there seems to be a real vacuum going into this. it seems to be dominant with no one else really standing up. where were the other parties? maybe convincing people what they should do and what they can do? >> at least one year. give space to the younger generation. having the same people and politicians that will lead us through this crises to be the one to get rid of it was not working. i think having some else the thing down is important to reach

an agreement and to have some new politicians and new leaders. guy: what are the names? the populace? charismatic? >> for the time being, i think this is not so important now. this is up to them to decide. if not, we will have brought the things going on in greece. guy: even if we don't get an agreement and he decides to go for elections, he is still stunningly popular. >> let's clear something.

we wouldn't talk about the same percentage. in the meantime, i would have to point out in one week he lost support. this is not something anyone can -- guy: if the banks don't open this week, how -- >> that's when telling you. we will be talking about in one week a whole different situation. people might change their opinion. they were told that we are safe and we would have an agreement in 48 hours. we are counting backwards now. the clock is taking. this is out loud and clear from people. guy: thank you very much.

anna: thank you. our guest is still with us. good to see you. give us other angles on the greek story. you have been some -- across some social media. >> indeed. some of it is really interesting. this has been a great victory in the no vote. it is really interesting. looks like it may only be just beginning. guy: doesn't he have a greater negotiating hand? >> clearly the public is behind him. they are dealing with worse

numbers paid it will be very challenging. guy: the clock -- anna: the clock is ticking. is everyone sick of the greece story? they're searching high and low for other things to talk about this morning. take us into the technology. >> this is a great story. basically, what are the patterns of life that they don't know when we are off-line? it is all about the gps is in our cars and where that is going. it looks like we may be up by the year 2020. anna: hmm. and something how cars could buy your morning coffee? >> this goes back to where you are going. it knows you go every morning.

tools will start popping up related to areas that you go to. anna: as long as you remain predictable. thank you very much. 6:54 a.m. in london right now. minute ahead of the european -- bonds market opening. let's get back to caroline. we're all looking to see how much tension or nervousness is being expressed in the yields this morning on peripheral bonds perhaps. : airline -- caroline: you're right. we will get the market reaction to the referendum. 62% of voters rejecting austerity. currently we could see this from 14 basis points according to

jpmorgan. have a percentage point to about 2.7%. follow my green line. we will see costs coming down. interestingly, not much of a reaction to the euro so far. they will no longer -- he put on twitter that he will no longer be finance minister. he said he will exit as finance minister and keep a close eye on borrowing costs. portugal italy on the spain, the periphery of europe could spike higher in terms of borrowing costs. anna: thank you. caroline hyde with the latest on the bond markets.

we're getting reaction in the euro. we hope for the analysis from our guest. they give. plenty more to come in our last hour of countdown. stay with us. ♪

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>> show we're the creditor's loading with pride. his message. --destroy message. celebrations of the square last night but greece faces and i'm certain after voters overwhelmingly rejected austerity measures. anna: merkel heads to paris. the german president will meet francois hollande to map out a way forward for greece. the chinese stock market rally fizzles out as government

measures to deliver -- failed to deliver. ♪ mark: welcome to athens, welcome to "countdown." anna: and welcome to the program, i am anna edwards in london. let's get you up to speed. risk aversion has been a feature of the early part of the trade. let's focus on the foreign exchange market and i will show you what has happened to euro anin the last three days. things moderated as investors started to think about how bad it will be an let's wait for the creditors to have their say. but the first comment of any significance came from the greek cap because we heard the finance minister varoufakis is standing down which is being seen as a positive for investors as to

whether a deal can be done because we have seen the euro moving higher as a result. 11067 is where we are. risk aversion was evident in the early creating and will streak that let's go you what happened to the japanese market -- reading market and to demonstrate that let's show you what happened with the japanese market. as we look ahead at the start of the european equity trading day we show you the move in treasuries and the euro has dropped 50 in the equity market. futures are down at the open so it seems as if risk aversion is still in evidence in the way that european equity markets are set to perform. we will see how that develops in the trading day. we will also have an eye on what is happening in the bond markets and whether we see signs of stress. let's get back to the top story with regard degrees, the finance

minister varoufakis is it quits after the greeks -- top story the finance minister varoufakis quits even after the greeks reject austerity. through-line is in brussels and paul joins us -- caroline joins us from brussels. reshot in resignation -- let's talk about the shock over the resignation of the finance minister. >> he told us that he would resign if there was a yes vote but what he did not say is that he would resign if there was an over. -- no vote. the new that there was a cold few months -- we knew that there were a few difficult months. he has not been the prime negotiator.

it will be interesting to see ultimately becomes the new finance minister. there were rumors in greece that some sort of a deal had been done between mr. varoufakis and mr. tsipras that mr. varoufakis would step down as a way of easing the story and allowing some sort of a deal to be done. maybe that has come true fruition. -- to fruition. this is part and parcel of the wider story, it has been an interesting 24 hours in athens with a strong showing for the no vote, catching many people by surprise. it is delayed bank holiday here in greece -- still a bank holiday here in greece. mr. tsipras saying that needs to. change and that will be a priority.

anna: caroline as the reaction from euro zone leaders. caroline: we have heard from the finance minister who is saying that the result of the new vote in the referendum is disappointing. he is also saying that there will not be any unconditional aid to greece so that kind of shows you how difficult the negotiations and br -- in brussels are going to be tomorrow. it might be slightly easier with the resignation of varoufakis but it will still be extremely difficult. we have also heard from martin who said that that does not mean that greece would get a better deal, even with this no vote. many have warned about the

consequences for the greek people. whether that will lead to a crisis with the banks remaining shot for the moment -- shut for the moment and capital controls in greece. the eu leaders summit tomorrow will be very, very long in brussels tomorrow night. the prime minister noted earlier that the greek government sought to protect the interests of the greek people, and that people in the creditors's countries will seek to protect their interests. anna: thank you very much, caroline connan. paul we come to you. their position is tougher than ever. i do not think i would want to be in frankfurt. paul: it will be a tough decision. they have always waited for politicians together act together and kept the banks

afloat and here we are, no program and no sign of one. the step down of varoufakis might make a deal easier to reach but it might still not happen and the banks are out of money. ecb will have to decide whether to extend emergency liquidity even further or raise it for the banks that can survive or does it say we are not going to see of result and under our own rules we cannot provide liquidity. a very difficult decision. you will bet you will see the ecb continuing to extend aid for a little while longer, that is what economists are saying, but it is not clear-cut. anna: in the meantime, what can the ecb due to calm market volatility? paul: this is very important. we have not seen particularly dramatic swings.the euro fell but has rebounded . ecb is ready to step in and has

multiple tools available, such as quantitative easing. it can change the terms and by more bonds and use monetary transactions. it has put backstops in place for eastern european countries including bulgaria which is heavily exposed to greece. the mortgagee for the ecb has said they will develop new tools if need be. he says they gave him the right to do that and they will do it. ecb is ready to step in if needed. anna: paul gordon joining us from frankfurt. let's get to our correspondent. what is it like from paris? the scene is set for activity this evening in paris. >> yes, exactly. angela merkel the german chancellor will come to meet with francois hollande, they will have a working dinner 24 hours before the summit. the reason is that the french

and the germans want to be on the same line. in public they have always kept a show of unity as the two largest economies in the euro zone. they have to be the ones driving any decisions. and they have to be unified. we know that in the background there are differences between them. the germans are more hardline and the french have been more conciliatory. they want to iron that out. anna: thank you to our correspondence. -- correspondents. with spring you up-to-date with something happening away from the greek story. rolls-royce talking about guidance for the full year. they are talking about cutting guidance on pretax profit. they say they can achieve significant improvement in return. it remains unchanged although they talk about net headwinds of

about 300 million. the revenue is unchanged for the full year. the underlying pretax is between one .32 5 million -- 1.32 5 million. they are bringing about a pretax profit level from rolls-royce which is a business under new management. let's get back to the greek story and look at the bond market reaction. we are seeing early reaction in the bond markets in caroline has the details. caroline: greeks reject austerity and there is movement. we saw it in the japanese bonds. now, flight to safety. six basis points, if you come into the screen you will see that we are training at .73%. money going into france as well. on the flip side of the peripheral debt market, we are

seeing portuguese costs going higher by 13 basis points. bonds are falling. italy and spain, money coming out of these countries and also out of greece. after put this in perspective, it is not that big of a selloff. last monday, on reaction to the agreement to have a referendum we saw italy up by a half percentage point. triple the amount we are seeing the market reaction now. clearly many have optimism that the ecb will be there to stand behind the debt market and by italian and spanish bonds -- buy italian and spanish bonds outright. remember, 2.3% for italy, back in 2011, throwing costs were at 7.5%. that was when contagion -- borrowing costs were at 7.5%.

that was when contagion was a concern. euro stocks down, money coming out as well. the futures are signaling a down day in the markets. anna: thank you very much for the latest on the bond market. let's get back or continue the conversation about the great story. finance minister varoufakis announcing that he is stepping down and i am joined by professor chris from the london school of economics. thank you very much for coming in. let's get your thoughts. does this sound like it positive development -- a positive development if you are looking for something between the creditors of the people? that varoufakis steps away. chris: aggregate should be because he was the one objecting most to almost everything -- i do think it should be because he was the one objecting most do almost everything.

we will have to see who is coming in next. because others are as extreme. i should say that it surprises me that he resigned because he campaigned for the no so energetically and said he would resign with a yes vote so i thought a no vote would have him stay in. that is an agreement within 48 hours which is another problem made by the prime minister and mr. varoufakis. anna: do you think that the banks will open this weekend a deal can be done in 48 hours? chris: i cannot see how. the key players are the european central banks because the greek banks have no money. they will not be able to give money to depositors so there will be no point to open tomorrow. it ecb decides to supply them with the liquidity that they need that maybe they can do business -- than maybe they can

do business but are they going to decide that? there are no assets that they can accept from greece. and of course there are questions that even if they do the side -- do the side -- to s -- decide. they will want to take out the euro. anna: stay with us professor christopher from the london school of economics stays with us live a longer. the reaction will start to come from creditors and we will get more of a gauge as to how far apart they remain. stay with "countdown." 45 minutes until european equities open up. we will have analysis ♪. ♪

anna: here are the stories you need to know this morning. varoufakis is a nasty is stepping down as the finance minister. says -- has announced he is stepping down as the finance minister. he says he is making the decision after he was made aware of the preference for him not to be at certain meetings. he says that he will wear the creditor's loathing with pride. greece has voted overwhelmingly to reject austerity measures. these were conditions of a new bailout deal. a crowd gathered, waving flags. the prime minister tsipras described the results as a great victory and says he will return

to negotiations with a strengthened hand. angela merkel heads to paris today to talk with francois hollande over the outcome. the leaders agreed that the decision of the greek people is to be respected. with an emergency summit called for tomorrow, fellow governments are preparing to wait for greece to offer proposals for the country to stay in the single currency. the european central bank governing council will meet today to discuss extending a lifeline. greek banks were closed this week. mario draghi will hold a conference call with the eurogroup president this morning. now, whatever greece besides, britain is prepared, those were the words of the u.k. chancellor as he prepares to deliver a budget. joining us now for a look ahead we will be across the u.k. story.

the u.k. authorities have been preparing for some time. >> they have been very seemed to stress they are ready -- keen to stress they have been ready for any eventuality. they are holding a meeting this morning with george osborne. they have contingency plans in place. obviously the u.k. is somewhat shielded from the crisis in the euro but we must not forget that the euro zone is the biggest export partner. so any consequences, that is one thing the government has been making clear, any slowdown in the euro zone will affect the u.k.. anna: is that the way we see the way we see this have an impact on wednesday's budget, reduced forecasts from the kobe are for exports -- obr for u.k. exports? svenja: greece was always one of the big risks so some of that has already been factored in.

at the same time it gives osborne an opportunity to say this is why we need to push austerity and get our house in order. uses those exact phrases. we do not want to go down that road. kit is not a good thing for the british economy but in a way it gives them a good line on the day . anna: we will have special coverage of the u.k. budget on bloomberg this wednesday. we will watch osborne's speech to the house of commons and then at 4:00 in the afternoon we will have a special program giving a unique take on the summer budget featuring top commentators from bloomberg's political unit bloomberg intelligence, and the business team. professor christopher is still with us and let's get back to the conversation about greece. you were never one of those economists that was in the camp

calling on greek voters to vote no. you must be disappointed. chris: i am disappointed and we do need an agreement. the majority of the population one degrees to stay in the euro. i think that greece will be better off in the euro. the question is, can greece stay in the euro now? for it to stay, it needs to have some agreement. it needs to have support from the european central bank. and those things are not guaranteed with such a strong nova. -- no vote. anna: where does it go now? they're talking on radio about how it is up to greece to make proposals now.

we keep hearing that it is up to the other side to make the next move. that seems a bit frustrating. chris: now it really is up to greece because a proposal was on the table. they rejected it, very strongly. not even changing something. they are saying that they are prepared to negotiate and compromise. they need to come forward with a proposal as to where do we go from here. they do need that money desperately to keep on paying debts and finance the government activities. and especially banks need liquidity. the key issue is whether banks can get the liquidity from the central bank because if they cannot than that liquidity will be have to be found domestically and the only way you can do that is by issuing what would be a second currency. anna: what kind of, what do we need to hear?

what level of resolution do we need? what level of optimism for them to increase the level of the ela? chris: in an ideal world we need an agreement with the eurogroup so that greece will not be officially bankrupt, insolvent. so greek bonds could be accepted by the ecb as collateral. we are not likely to get that before greek banks would get into a desperate state. ecb will have to say that we are standing by to support great bikes until an agreement -- greek banks until an agreement is reached. will they say that? i doubt they will give such a carte blanche. anna: to you see parallels for -- do you see parallels for cyprus? chris: cyprus now was in a

better condition and we should not be associating it with greece. there are parallels with it two years ago to the extent that greek banks -- i'm sorry, cyprio t banks need to capitalize and the ecb was not offering the money because it was going to bring sovereign debt to unsustainable levels and they decided to capitalize banks internally. anna: they use the depositor's money. chris: of course it was tragic for many people who had a lifetime of savings that suddenly disappeared. before their point of view it was a successful policy because no cpriot -- now cypriot debt is sustainable. which is what they were fighting and other people including the imf, i believe that, the the

debt is unsustainable and should be brought down to 120% of gdp. cpyprus was done by using depositor money in the major cypriot banks to avoid having sovereign debt. anna: if the ecb does not increase emergency liquidity assistance to the banking sector and the government has to decide between printing parallel currency and bailing developers what will they choose? chris: i think they will print their own currency. in vast quantities and have it depreciate. and inflation. but of course nobody can throw them out of the euro and they will not voluntarily say they are quitting the euro. they will say it is a temporary, transitional need of

liquidity and when markets come down with an agreement we will withdraw. anna: professor, thank you so much for giving us your time and insight. professor christopher. when we come back, greece was defiant about austerity. we will have reaction from business. ♪

anna: welcome back, you are watching "countdown." let's check in on the markets. this is the reaction to the vote in greece, no on austerity. we have seen a flight to safety trade across barriers. typified by what we saw in the euro, we saw the euro moving down and that will higher against the dollar in the early parts, the overnight. and then we got news of varoufakis the finance minister, he says he is stepping down and the euro spiked up higher as a result. elsewhere away from the euro more typical moves, risk

aversion trades. flight to safety taking place in the japanese currency, we saw that in evidence. the equity market losing ground reflecting the other side complicated by the chinese market over the weekend. the authority taking steps with brokerages to underpin the market, the stock market. hang seng down by 4%. in treasury markets let's look for evidence of safe haven buying if you like in that market. and we can find some. grease saying no has boosted treasuries and put downward pressure on the yields. 2.3% right now. here are the stories you need to know. varoufakis has a nasty is stepping down as the greek finance minister. on his website he says this is because he was made aware of a

preference for his absence from meetings. he says it is his duty to help tsipras as the prime minister sees fit. greece voted overwhelmingly to reject further austerity measures demanded by creditors. 61% of voters said no to spending cuts and tax increases. as people filled the square last night in central athens waving greek flags, prime minister tsipras described the results as a great victory and said he will return to the negotiating table with a strengthened hand. german chancellor angela merkel will have different to talk with francois hollande -- faded to paris to talk with francois hollande. they decided that the decision of the greek people is to be respected. as an emergency meeting -- set for tomorrow -- with and emergency meeting set for tomorrow they are waiting for proposals from greece to stay in

the single currency. let's get business reaction to the referendum results. joining us on the phone is chief executive martin sorrell. great to have you on the program. martin: i don't know if you can see me, you can hear me. anna: i can hear you. were alive. -- we are alive. can you characterize this as far as reaction from your business? martin: increases levels of uncertainty in markets and clients, particularly at times like this do not like it. one view that does not get enough airtime is what is happening in china and the stock markets in china. we have seen a fall in industry something like 30% in the last few months and i think that is also rattled a few people. generally it means increased

uncertainty at a time when gdp growth is not strengthening. it is either neutral or weakening and we saw that in the second half of last year and the first half of this year. you just adds to people's concerns and makes them more conservative -- it just adds to people's concerns and makes them more conservative and want to limit costs and makes the environment more difficult to stop whatever the implications -- difficult. whatever the implications are. it looks as if the cfo effectively resigned a few minutes ago to enable the restructuring talks to renew and start again. whether they will be successful or not i will see, i do not think they will be successful in the timeline mainly 48 hours. it has implications for the british negotiations with the european community as well mother that strengthens prime minister cameron's hand or

weakens it. -- whether that strengthens prime minister cameron's hand or weakens it. it might give him a stronger hand in negotiations on the terms of our referendum. anna: we're just hearing that the greek prime minister tsipras is putting in a new finance minister, a new cfo as you put it, after a leaders meeting. i do not know if you play this game. the lie awake at night ranging the things you are worried about -- do you live awake at night ranking worried about and if so are you want worried about research china? --china? martin: china because it is larger. anything in china is much more. greece is something like .1% of revenues worldwide. including at .3%.

it is very minimal. with the pressure on the greece economy -- greek economy it has fallen over the past two years and greece has been a problem in the terms of the european community for five or six years and therefore people have taken steps including ourselves to deal with this. what it means really, for the british negotiations and the british referendum and the way the greeks handled the referendum has been quite extraordinary, the nature of the resolution, how it was framed on the ballot paper with a no vote being above the yes vote is extraordinary. maybe we should use that in the scottish referendum, who knows. anna: no doubt everybody will be learning a lot from the way the referendum took place. martin: hopefully they will not be learning is that is the point of it. -- because that is the point of it.

anna: thank you martin sorrell. let's get to caroline hyde, watching the bond market reaction. we have seen a flight to safety trade this morning. evidenced in the bond markets. caroline: not as much as we saw last monday when the market reacted to the announcement that a referendum would come. and not greece decides 61% -- now greece decides 61% to reject and we are seeing a flight to safety. germany is up five basis points. we're looking at the debt price what would cost to germany to issue tenured at. money going -- 10 year debt. money going into france's well. bonds falling as well. italy and spain, prices rising. on monday we saw them spiked by

15 basis points, half a percentage point with borrowing costs rising. there seems to be optimism that ecb will stand behind with quantitative easing to protect against contagion. remember that we saw italian borrowing costs up and they are still just 2.3% to that is a move out of the market today. peripheral markets are falling and the bigger movement is in the stock market with futures up by 2.5%. interesting from the capital group saying we will see a heart attack in the stock market this morning in reaction to the referendum but do keep an eye on the italian and spanish and portuguese banks. they will be some of the biggest followers because they are the most exposed to the peripheral debt market. anna: we will keep an eye on those as the european equity markets opened up in 20 minutes

time. what kind of equity market reaction will be have? looks like a negative reaction as cure line was saying, but we will be weaker at the start of fray. no surprise. how long will we be week? that will be one of the questions we deal with. the first trading day of the week, stay with us on "countdown ." ♪

anna: welcome back, you are watching "countdown" on bloomberg television. let's get up-to-date on what the futures suggest we will see at the start of the european trading day. we are digesting this decision with 61% of greek voters saying no to austerity. this is the picture we were expecting to see at the start of the european trading day. euro stoxx 50 down 2.5%.

outside of the euro zone, less exposed. the dax down by more than 2% at the start of the trading day. result reaction of the currency markets with safe haven buying -- we saw reactions with the currency markets with safe haven buying. the creditor nations are going to step for -- forward and say what they want to see. yen has been rising. a flight to safety or safe haven trade. typical also is a move into treasuries and that is what we saw, treasuries gaining ground. that trade is unwinding as we go through the morning session but nevertheless the initial slightly fear reaction we saw in the market still in play. here are stories you need to know this morning. varoufakis has announced he is stepping down as the finance minister.

in a post on his website he says this is because he was made aware of a certain preference for eurogroup participants for his absence. he considers it his duty to help tsipras as the prime minister and he will wear clothing with pride -- loathing with pride. 61% of voters said no to spending cuts and tax increases as a condition of a bailout deal. as people filled the square in central athens, prime minister tsipras described the result is a great victory and said he will return to the negotiating table with a strengthened hand. german chancellor angela merkel will head to paris today to talk with francois hollande over the outcome of the grief referendum. -- greek referendum. they held a call last night and decided the decision is to be respected. with an emergency summit called for tomorrow, euro area

governments are preparing to wait for greece to offer proposals to stay in the single currency according to a government official. we are 15 minutes away from the start of equity trade monday morning. joe, looks as if we will see a weaker start for equities, no surprise i guess. joe: i think it will be very negative here. i think the majority, the 61%, has surprised markets. that i think the strength of it will limit the set off because it is such a clear mandate. looks like there will have to be a deal to be done and that will be in the coming days. anna: that is interesting. what are you looking for in terms of the timing of events as they unfold? what are the next trigger points? you have this meeting of merkel

and hollande. joe: think it will be an interesting game of cat and mouse. they will want to drag it out because as they go farther through the week the banks come under pressure and reduce the strength of the greek negotiating point where is the greeks will want to come to the table quickly and get a deal done but they need a headline victory. we saw that starting out today with the greek finance minister resigning. that is saying we're here to negotiate and we want to do a deal quickly. it is who blinks first and i think it will be the greeks and the deal will be done later in the week. anna: you wonder what the ecb does in the meantime. joe: i think so i think they will probably look for the eu to guarantee greek government debt if they want to extend further help to the greek banks. i am not sure that is going to happen so we could see a situation tomorrow or wednesday where greek banks run out of

money. and i expect to see the amount of people can withdraw talk from 60 maybe to 30 or 20 tomorrow -- cut from 60 maybe 230 or 20 tomorrow. anna: let's get further political reaction to the greek situation. we are joined on the phone by professor edward. thank you very much for joining us. i'm wondering if you could give us reaction to the resignation of the greek finance minister? is that a material change for you in terms of where the conversation goes next? edward: anyway yes, because negotiations -- in a way yes, it is negotiations are done by people that are human. it does help a lot to see each other. if you are irritated you start getting hard and that is not fair on who you're representing. i think it does help.

we do not want to interfere with that, that is the choice of the greek government to do that. i think it will count a lot. anna: was is entirely a decision left to the greeks? did his resignation letter he said that he was made aware of other elements who did not want him involved in the conversation. as the eurogroup pressure -- has the eurogroup put pressure? edward: it is a question of getting certainly because there is a lot of confusion including in the greek mind because they do not know what the alternatives are. they do not know what the results are. and by voting against taxation or against expenditure cuts, i mean we could have held those type of referendums in ireland 5% portugal. the results would have been the same if not higher.

i am not impressed with 60% but obviously it does tell that the people do not know the realities and the alternatives. and perhaps there should be in the future a referendum if it comes to a grexit, that should be the choice of the people. in any case, whatever is done should be managed. we cannot get an unmanaged grexit. it would have devastating effects on greece and on the euro. anna: before the referendum took place many in the euro area were just trying to pay this as a referendum on euro zone membership although it is not clear and seems unlikely that that is what the greeks were voting on. does the eurogroup continue to stick to that message? will it be counted as a vote on membership or will it be seen specifically as a vote on austerity? edward: it is very obvious that

nobody on the eurogroup side or the greece side wants to pull the plug. they do not want to be held responsible for a greek exit. that is clear. however what is happening is we are sliding towards that point. so it will become individuality a default by itself. not intentionally but it is not helping. it is like not wanting to mention divorce but the quarrels are leading to that point. it is not the question of whether you want to go or not it is a question of what is on the table. in the eurogroup or the people in the other 18 countries are going to be asked not whether it should be paid because almost it is now becoming trivial although it is a lot of money, 7.2 billion. compared to a new bailout with greece that requires -- which greece now requires. the hole is gotten bigger and

bigger, so much that we will be asked for a new bailout and that is where you then look reality in the face and say, i am going back to my people and we are not just pointing it germany. i am going to get all of the eurogroup including the eastern european countries. are we going to ask our people to borrow again in order to lend to greece when we do not have any certainty that you will get money back? anna: will that forgiveness be on the table this time around more than a week or two ago? edward: if that package, it raiemains,edward: and it could lead to a turnaround, there should be some profiling are to do not thi i can preempt what is going to take pla.

-- profiling. i do not think i can preempt what is going to take place. let's hope that there will not be any sort of -- what we do not want to see our tricks. -- are tricks. and that kind of brinkmanship. we all want greece to succeed but in order to lend money and more money, you have to have some sureity that you are going to succeed. anna: the professor was talking about game theory, do you think he was playing game theory with greece's future? edward: the managed to alarm and in that respect he was successful but so was the election itself. the result was a very clear statement that the people were tired. but they are not sure what they

are tired for and also they cannot compare to other countries. it could be true that they are suffering. but, you know, there are poor people and the other 18 eurogroup countries as well. there are patients much lower than greece. since you were asking the other 18 to help you, they will ask questions. it is as simple as that. anna: in terms of the positioning in the eurogroup with regards to get forgiveness for greece, who was most against it? germany and italy? or is it another voice? from the eurogroup were creditors, who was most against that forgiveness -- or creditors, who is the most against that forgiveness? edward: we are all united.

it was greece that united the whole group unfortunately because there were a lot of friends and they started losing them one by one which was unfortunate. there were many ministers who were trying really hard to help greece. but they were rebuffed in the attitude and the way that things were going on. in the moment the eurogroup is very united and they are very irritated and now they need to get back and calm down and say let's look at things calmly because this can damage not just greece but also us. anna: thank you so much for your time, professor edward, finance minister for the republic of moldova. "o the move"n is up in just a

few moments time. >> greece getting leverage from the greek people. will they get leverage from the market? and move of 10 basis points ahead of the open, not big. a move on german yields so not a big gyrations people might have expected on a no. the best case scenario for jpmorgan is an exit and the best case for a market is that we get a deal. anna: mixed feelings this morning. that will do it for "countdown." jon ferro's back of the top of the hour with all of the market moves you need to know on "on the move." ♪

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jonathan: good morning and welcome to "on the move." i am jonathan ferro. moments away from the start of the european stock market open. strict your morning break. shock resignation. yanis varoufakis steps down to pave the way for a deal with creditors after greece voles or move does overwhelmingly to say no to austerity. jpmorgan and barclays see a greek exit as the best case scenario. losing the. chinese authorities try was a den to save the biggest desk trying once again -- trying once again to say the shanghai

composite. futures markets are down. futures are down by six and six points. -- 66 points. a choppy day ahead. caroline: a third day of losses on the stoxx 600. cardiac arrest is what the london capital group said the expected for the stop market. awful by 0.3% in the u.k. but the cac 40 is up by almost 2%. we saw gyrations last monday risk aversion concerns. jpmorgan barclays all expecting base case scenario now is greece admits the eurozone. we wait half an hour to see how the greek market reacts.