Business World

Wednesday 26 October 2016

Greece crisis: Defiant Tsipras asks Greeks to vote no in referendum'

Renee Maltezou and Robert-Jan Bartunek

Published 01/07/2015 | 06:31

A man searches the contents of a public trash bin on a street in Thessaloniki, Greece
A man searches the contents of a public trash bin on a street in Thessaloniki, Greece
Demonstrators shout slogans during a rally organized by supporters of the YES vote for the upcoming referendum in front of the Greek Parliament in Athens, Tuesday, June 30, 2015 Greece's European creditors were assessing a last-minute proposal Athens made for a new two-year rescue deal, submitted just hours before the country's international bailout program expires and it loses access to billions of euros in funds. (AP Photo/Petros Karadjias)
Visitors look at the Tokyo Stock Exchange (TSE) bourse in Tokyo, July 1, 2015. Japanese shares edged up on Wednesday as a central bank survey showed big businesses plan to increase capital spending at the fastest pace in a decade, but gains were limited as investors remained cautious on developments in Greece. REUTERS/Toru Hanai
A demonstrator holds a banner during a rally organized by supporters of the YES vote for the upcoming referendum in front of the Greek Parliament in Athens, Tuesday, June 30, 2015. Greece's European creditors were assessing a last-minute proposal Athens made for a new two-year rescue deal, submitted just hours before the country's international bailout program expires and it loses access to billions of euros in funds. (AP Photo/Petros Karadjias)
Pro-Euro protesters attend a rally in front of the parliament building, in Athens, yesterday
Greek Prime Minister Alexis Tsipras
Pro-EU protesters take part in a rally in front of the Greek parliament in Athens last week. Photo: Yannis Behrakis/Reuters
Visitors look at the view across the city from beneath the Parthenon temple on Acropolis Hill in Athens, Greece
Protesters attend an anti-austerity pro-government rally in front of the parliament building in Athens.
Tourists visit the ancient Acropolis hill in Athens as Greek voters prepare to decide in a referendum on Sunday on whether their government should accept an economic reform package. Photo: Milos Bicanski/Getty Images
Pensioners waiting outside a closed National Bank branch and hoping to get their pensions, argue with a bank employee (L) in Iraklio on the island of Crete, Greece REUTERS/Stefanos Rapanis
A bank manager explains the situation to pensioners waiting outside a branch of the National Bank of Greece hoping to get their pensions, in Thessaloniki, Greece June 29, 2015. Greece closed its banks and imposed capital controls on Sunday to check the growing strains on its crippled financial system, bringing the prospect of being forced out of the euro into plain sight. REUTERS/Alexandros Avramidis
A migrant collecting card board pushes his trolley in front of Stock Exchange, on the first day of capital controls imposed to prevent Greeks from withdrawing all their savings from the banks, in Athens, Monday, June 29, 2015. The stock exchange was shut, and banks will remain closed until July 6. The developments are a dramatic twist in the country's five-year financial saga. (AP Photo/Thanassis Stavrakis)
Protesters shout slogans during a demonstration outside the Greek Parliament in Athens yesterday
Ken Hickey, from Templeogue, outside his bar 'The Dubliner' which he is due to open in Thessaloniki, Greece
Letters spelling the word 'GREECE' are reflected in a table top in this picture illustration taken in Berlin, Germany June 30, 2015. The head of the European Commission made a last-minute offer to try to persuade Greek Prime Minister Alexis Tsipras to accept a bailout deal he has rejected before a referendum on Sunday which EU partners say will be a choice of whether to stay in the euro. But Greek government sources said the leftist premier stood by his rejection of the creditors' conditions and Greece would default on a crucial repayment due to the International Monetary Fund on Tuesday, plunging it deeper into financial crisis. REUTERS/Pawel Kopczynski
An elderly man waits to receive his pension outside the National Bank of Greece headquarters in Athens (AP)
Demonstrators gather to protest against the European Central Bank's handling of Greece's debt repayments, in Trafalgar Square in London, Britain, June 29, 2015. Stunned Greeks faced shuttered banks, long supermarkets lines and overwhelming uncertainty on Monday as a breakdown in talks between Athens and its international creditors plunged the country deep into crisis. REUTERS/Neil Hall
IMF managing director Christine Lagarde and Finance Minister Michael Noonan and French Finance Minister Michel Sapin at the meeting in Brussels
Pensioners discuss politics while waiting at a national bank’s ATM to withdraw some money in the Greek capital Athens yesterday

A defiant Prime Minister Alexis Tsipras urged Greeks today to reject an international bailout deal, wrecking any prospect of repairing broken relations with EU partners before a referendum on Sunday that may decide Greece's future in Europe.

  • Go To

Less than 24 hours after he wrote a conciliatory letter to creditors asking for a new bailout that would accept many of their terms, Tsipras abruptly switched back into combative mode in a television address.

Greece was being "blackmailed", he said, quashing talk that he might delay the vote, call it off or urge Greeks to vote yes.

The remarks added to the frantic and at times surreal atmosphere of recent days in which acrimonious messages from the leftist government have alternated with late-night offers of concessions to restart negotiations.

A day after Greece became the first advanced economy to default on debt to the IMF, long lines at cash machines provided a stark visual symbol of the pressure on Tsipras, who came to power in January vowing to end austerity and protect the poor.

"A 'No' vote is a decisive step towards a better agreement that we aim to sign right after Sunday's result," he said, rejecting repeated warnings from European partners that the referendum would effectively be a vote on whether Greece stays in the euro or returns to the drachma.

European Council President Donald Tusk retorted in a tweet: "Europe wants to help Greece. But cannot help anyone against their own will. Let's wait for the results of the Greek referendum."

Euro zone finance ministers held an hour-long conference call to discuss the previous night's offer from Tsipras, but were adamant that no further discussions would be held until after the Sunday vote. The head of the currency zone ministers' Eurogroup, Jeroen Dijsselbloem, said he saw "little chance" of progress after Tsipras's latest comments.

Global financial markets have reacted remarkably calmly to the widely anticipated Greek default, strengthening the hand of hardline euro zone partners who say Athens cannot use the threat of contagion to weaker European sovereigns as a bargaining chip.

In his overnight letter to creditors, seen by Reuters, Tsipras agreed to accept most of their demands for taxes and pension cuts and asked for a new 29 billion euro loan to cover all debt service payments in the next two years.

However even if negotiations do restart after the referendum, Germany and others made clear that any talks on a new programme would have to start from scratch with different conditions.

The exasperated tone to public comments of European leaders exhausted by the chaotic turnarounds of the past few days offered little hope of a breakthrough.

A spokesman for Ryanair said many Greek customers were unable to book online with their cards, due to the controls, but that the airline would allow customers to pay for tickets in cash at Ryanair ticket desks at airports.

Tsipras has suggested he would step aside if Greeks vote yes in Sunday's referendum, and many other euro zone countries have made little secret that they see no point in negotiating with him before then.

"This government has done nothing since it came into office," German Finance Minister Wolfgang Schaeuble said in a speech in the lower house of parliament in which he accused Athens of repeatedly reneging on its commitments.

"You can't in all honesty expect us to talk with them in a situation like this," he said.

French Finance Minister Michel Sapin, among Greece's strongest sympathisers in the euro zone, told RTL radio: "The aim is to find an agreement before the referendum if possible... But it's dreadfully complicated."



Greece has shut its banks this week, imposed capital controls and limited teller machine withdrawals to prevent the public from emptying the banks.

On the third day of the closure, the costs were biting deeper for ordinary Greeks, with long lines forming at many ATMs and limited amounts of cash being doled out to pensioners. Even with a withdrawal limit of only 60 euros a day, there were signs of banknote shortages, with bankers saying 50-euro and 20-euro notes were running low.

Kiki Rizopoulou, a 79 year-old pensioner from Lamia in central Greece had to travel to Athens to collect her pension, spending 20 euros of the 120 euros she was allowed to take out.

"I already have to pay back 50 euros that I owe. It's embarrassing," she said.

An opinion poll showed opposition to the bailout in the lead but also that the gap had narrowed significantly as the bank closure and capital controls began to bite.

Posters from the ruling Syriza party calling for a "No" vote started to appear in central Athens. The centre-right opposition ran television spots mocking previous comments from the government that capital controls would never be imposed.

The Tsipras letter asking for a new bailout deal appeared to move closer to accepting creditor demands. But it contained only a single sketchy reference to labour market reform and no mention at all of frozen privatisations, both big priorities for the creditors.

He asked to keep a discount on value added tax for Greek islands, stretch out defence spending cuts and delay the phasing out of an income supplement to poorer pensioners.



The lack of panic on financial markets stood in marked contrast to 2011, when the Greek crisis was perceived as a threat to the future of the single currency and investors bid up the borrowing costs for other countries seen as in danger, like Spain and Italy. Most euro zone leaders now believe any damage to the currency zone from Greek turmoil can be contained.

The European Central Bank's policymaking governing council was to meet in Frankfurt to decide whether to maintain, increase or curtail emergency lending that is keeping Greek banks afloat despite a wave of deposit withdrawals and the state's default.

Germany's Bundesbank was leading hawks who argue that the ECB cannot go on providing funds through the Greek central bank as before to lenders that are backed by an insolvent sovereign.

One possible move would be to increase the "haircut" charged on Greek government bonds presented by Greek banks as collateral for funds in light of the IMF default.

A poll by the ProRata institute published in the Efimerida ton Syntakton newspaper showed 54 percent of those planning to vote would oppose the bailout against 33 percent in favour.

However a breakdown of results between those polled before and after Sunday's decision to close the banks and impose capital controls showed the gap narrowing.

Of those polled before the announcement of the bank closures, 57 percent said they would vote "No" against 30 percent who would vote "Yes". However among those polled after, the "No" camp fell to 46 percent against 37 percent for "Yes".


Read More

Promoted articles

Editors Choice

Also in Business