NEW YORK (TheStreet) -- With debt totaling more than $25 billion from the European Central Bank and International Monetary Fund and Greek treasury bills due within this year, the referendum on July 5 will decide whether Greeks accept or reject the bailout proposal offered by Greece's European and IMF creditors.
Having recently missed its June 30 payment of $1.7 billion to the IMF, Greece won't negotiate with its creditors until after the referendum.
R. Nicholas Burns, Harvard University professor and former United States ambassador to Greece, sat down with TheStreet's Rhonda Schaffler to speak about the situation in Greece as the country sits on the edge of default.
Headlines on the subject of Greece and its impending debt financing have been changing almost hourly as the country gets dangerously close to defaulting and potentially exiting the European Union.
But with new proposals for the Greek budget and its debt obligations on the table, Burns said that "we are likely to see negotiations after the referendum is held on July 5."
If Greece votes no on the referendum and rejects the bailout program, then Greek Prime Minister Alexis Tsipras "will go back to the European Union, the Central Bank and the IMF and say, 'I've got the support of the Greek people, negotiate with me' and think he will have a stronger position," Burns said.
This situation could lead to one of two outcomes. Either Greece and its creditors go back into negotiations over austerity measures and refine the terms of the debt to find something on which the two parties can agree, or Greece's creditors are unwilling to renegotiate and the country defaults on its debt and potentially leaves the EU.
Alternatively, if Greece votes yes on the referendum, "then [Tsipras] has to accept the bailout package the EU offered him" despite his refusal of the package last week, Burns aid.
Doing so would be a political blow to Tsipras and show his inability to successfully renegotiate with Greece's creditors, having told the Greek people to vote no on the original bailout program and wait for a proposition from creditors that would allow Greece to maintain its pensions, salaries and taxes.
"Ultimately, the Greek government will have to accept the bailout package from the EU, but it's trying to look like its renegotiated it: with Tsipras using the referendum "as part of a negotiating strategy," Burns said.
Burns called this runaround with Greece, its people and its creditors the ancient Greek art of "political drama" but said that Tsipras has miscalculated how it will play out.
Burns sees Greece accepting and remaining in the EU as the most likely outcome because of all of the benefits the country receives from being a member and as the largest recipient of grants and infrastructure funding, which has allowed for rebuilding.
However, with all of the rallying by Syriza, the Greek leftist governing party, urging Greeks to vote no, Burns said that at this point, the vote could go either way. A recent poll has shown that public opinion is 50-50.
Michael Ingram, market analyst at BCG partners, told TheStreet's Scott Gamm that "the message is the consequences of a no vote," explaining that both France's head finance minister and the head of the Eurogroup of finance ministers have made statements saying that if Greece votes no then they wouldn't want to talk to Syriza.
The ministers sounded "as if they wanted to some sort of regime change in Greece," Ingram said.
However, the question on the ballot is about the bailout program and not on whether Greece should exit the eurozone, and voting no won't result in Grexit but will instead increase the chances of it happening, he said.
"The more the eurozone brands this vote as a decision on the euro, the more they actually say, 'we are actually acknowledging for the first time that eurozone membership is actually reversible,'" Ingram said.
If Greece votes no and exits the eurozone, the country could go back to the drachma.
Burns sees the government losing power and the support of the people if this were to happen because of how many times the Greek government has miscalculated how the EU would react in negotiations and the uncertainty over how the markets would react to the reinstated currency.
Germany could be the biggest loser if Greece votes no and defaults, given that the German government has nearly $56 billion of debt issued to the Greek government, Ingram said.
"I think it's looking pretty grim for Germany any way you look it," he said.
However, Burns said that "nearly every country is lined up behind Germany in supporting the hard line Germany has taken to Greece" given that nobody seems to consider Syriza to be a serious negotiating party.
"No policy maker is going to come out of this looking good, no matter what the vote is Sunday," Ingram said.