“Regardless of the outcome, Greece will continue to face substantial economic dislocation in the shorter term,” Goldman’s Huw Pill said.

“Greece will ultimately remain in the Euro area even in the event of a ‘No’ vote.”

The IMF is backing its original claim that a debt haircut is absolutely necessary, however, Goldman Sachs, agrees with Greece’s Finance Minister Yanis Varoufakis that Greece will remain in the Eurozone.

“A ‘No’ vote, in which the current government becomes more politically entrenched is likely to be viewed negatively by markets,” Pill added.

“We do not see such an outcome as necessarily implying a definitive ‘Grexit’. In the first instance, such an outcome is likely to perpetuate the status quo: the European authorities would neither extend further financial and liquidity support nor engage in a new round of negotiation with the Greek government offering more favourable terms.”

According to Sachs the ‘Oxi’ result, will force Greek banks to remain closed and the economic situation will deteriorate, ultimately triggering political change as the economy seizes up. Of course, that change could long term move in a chaotic direction leading to a ‘Grexit’.

“Any attempt to shift policies in the direction of exit would prompt a domestic political response bringing down the government and moving to an accord with Brussels to maintain membership of the Euro area.”

“For Tsipras to have had the full leverage he wanted, he should have had this standoff last year, before the ECB launched its QE,” Pill concludes.

Source: Goldman Sachs