It is not necessarily easier to spell out what the Greek referendum means after its 'no' result than it was beforehand.

Beforehand, it seemed that whatever the outcome, Greece was in trouble. The substantial 'no' vote only seems to emphasise the point. A summit called tomorrow (7 July) by eurozone political leaders will discuss what to do next. They need to belatedly wake up to reality - the reality of a eurozone project that is every bit as much their failure as that of Greece.

The 'no' in the plebiscite was to the terms of the last bailout offered by Greece's creditors. So if the bailout is rejected, what does that mean about Greece's future in the euro?

This comes to the heart of the contradiction about the country's present predicament. The people seem to want to stay in the euro, but they want to abide by none of the fiscal constraints that membership of the currency imposes upon its members. That seems an unchanging point of view.

Greek referendum 5 July
Anti-austerity 'No' voters celebrate in front of the Zappeion in Athens, Greece July 5, 2015. Reuters/Jean-Paul Pelissier

Therefore, the sensible thing for the European Central Bank (ECB) to do now would be for it to say that since Greece appears irreconcilable to the rules by which every other eurozone member has to play, and will not accept the bailout terms, then there can be no bailout.

That means Greece defaults on its debts. It should also mean that it leaves the euro, but it is at that point that the question becomes intensely political.

In or out of the eurozone

It is theoretically possible for Greece to default on some of its debts and stay in the euro. Such an outcome would suit some other European leaders, as they could maintain the fiction that membership of the currency was irreversible, and none of those who had been engaging in a storm of rhetoric against the Greeks in the run-up to the referendum would have to take responsibility for forcing Greece out of the eurozone.

However, it would set the most appalling example to other countries whose economies are not, frankly, much sounder than Greece's, and would damage what is left of the euro's reputation as a sound currency.

If debt denominated in that currency can be defaulted upon without consequences to the defaulter, than the value of the currency will plummet.

Greece is set for a period of serious economic pain.

But back to that rhetoric storm: in order to frighten Greek voters, word came out of other European capitals last week, notably Paris and Berlin, that if Greece rejected the bailout terms, it would be out of the euro.

So will the paymasters of Europe follow through?

If they do, the European project is seriously undermined, the precedent is set for a country to leave the eurozone, and damage is done to the credibility of the currency.

If they don't, then who is going to take such rhetoric seriously in the future? Who is going to take any of the rules constraining the single currency seriously?

What happens next?

Whatever happens now, Greece is set for a period of serious economic pain. If the plug is pulled – which seems the most likely eventual outcome, however long the decision is delayed – then the replacement currency Greece will have to devise will collapse in value from whatever point at which it is first floated.

Greek referendum 5 July
'No' voters in front of the Greek parliament in Syntagma Square in Athens, 5 July 2015. Greeks defied warnings from across Europe that rejecting new austerity terms would set their country on a path out of the euro. Reuters/Marko Djurica

The country will struggle to afford to buy imports, but it will be a bargain basement for external investors – which could be the route to its eventual recovery.

If Greece is allowed to stay in and default then the markets will turn on the eurozone, and the fiscal solidity on which the euro was built will evaporate.

If Greek Prime Minister Alexis Tsipras chooses to ignore the results of the referendum and accept, after all, the austerity plan, then his government will fall and Greece may well subside into widespread civil unrest.

There is no easy way forward either for Greece or for the European project. In fact, however wretched things are going to be for the Greeks, the most severe consequences will be suffered by those who have made it their job to pursue ever-closer union in Europe.

It will no longer be sustainable to argue that one size fits all, and that there is an economic culture in Europe common to all countries in the eurozone.

This has been one of the fundamentals of the whole project, and for it to be proved utterly false will be a devastating blow. It may not be the case that European equity markets will fall like a stone, or even the value of the euro itself – both of those things may already have been discounted by the markets. But what has probably been insufficiently discounted, so far, is the credibility of the architects of the European project, and their loyal followers.

That it has taken this long for Greece to die its long death as a credible eurozone economy has been a measure of how desperate other powers have been to keep it in: not for Greece's sake, but for the sake of saving their own face.

They tried for years to do the impossible, arrogantly believing they could not fail. However the summit on 7 July tries to dress up the outcome, they have failed.

Dr Simon Heffer is a British commentator and author who has written columns for The Daily Mail, The Daily Telegraph, The Spectator and The New Statesman. He is the biographer of Enoch Powell, Thomas Carlyle and Ralph Vaughan Williams and recently published High Minds: The Victorians And The Birth Of Modern Britain.