Wednesday 28 September 2016

Greece crisis: Greeks defy Europe with overwhelming 'No' to austerity terms

* With 90% of votes reported, it stands at 61.54pc for No and 38.46pc for Yes
* Officials state that participation in the vote was above 50pc
* No plans for an emergency meeting of euro zone finance ministers
* Referendum set to decide Greece's future in euro
* Greek banks on verge of collapse

Caroline Crawford in Athens, and agencies

Published 05/07/2015 | 17:17

People celebrate in front of the Greek parliament as early opinion polls predict a win for the Oxi, or No, campaign in the Greek austerity referendum. Photo: Christopher Furlong/Getty Images)
People celebrate in front of the Greek parliament as early opinion polls predict a win for the Oxi, or No, campaign in the Greek austerity referendum. Photo: Christopher Furlong/Getty Images)
Anti-austerity 'No' voters celebrate the results of the first exit polls in Athens, Greece. Photo: REUTERS/Yannis Behrakis
A ballot box is emptied by a voting official at the closing of polling stations in Athens, Greece
A woman holds a placard with a Greek national flag next to a message in Greek reading, "No" during a rally. Photo: REUTERS/Javier Barbancho.

Greeks voted overwhelmingly today to reject terms of a bailout, risking financial ruin in a show of defiance that could splinter Europe.

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With over 90pc of the votes counted, official figures showed 61.44 percent of Greeks rejecting the bailout offer. An official interior ministry projection confirmed the figure as close to the expected final tally.

A woman leaves a polling booth to cast her ballot during a referendum vote in Athens, Greece, July 5, 2015. REUTERS/Marko Djurica
A woman leaves a polling booth to cast her ballot during a referendum vote in Athens, Greece, July 5, 2015. REUTERS/Marko Djurica
Maps of Greece hang on the wall next to a voting booth in a polling station at a school's classroom in Athens, Greece July 5, 2015. REUTERS/Yannis Behrakis
The moon sets behind a Greek flag over an elementary school used as polling station in Athens, Greece July 5, 2015. REUTERS/Yannis Behrakis
An elderly voter waits outside a polling station at an elementary school in Athens, Greece July 5, 2015. REUTERS/Yannis Behrakis
A voter enters a polling station at a school's classroom in Athens, Greece July 5, 2015. REUTERS/Yannis Behrakis
A voting official prepares documents before opening the the polling station during a referendum in Athens, Greece, July 5, 2015. REUTERS/Jean-Paul Pelissier
People prepare to cast ballots during a referendum in Athens, Greece, July 5, 2015. REUTERS/Jean-Paul Pelissier
A man casts his ballot during a referendum in Athens, Greece, July 5, 2015. REUTERS/Jean-Paul Pelissier
A man prepares to cast his ballot during a referendum in Athens, Greece, July 5, 2015.REUTERS/Jean-Paul Pelissier
A voter enters a polling station at a school's classroom in Athens, Greece July 5, 2015. Greece voted on Sunday on whether to accept more austerity in exchange for international aid, in a high-stakes referendum likely to determine whether it leaves the euro-currency area after seven years of economic pain. REUTERS/Yannis Behrakis
Ballot papers are seen on a table as a man leaves a polling booth before casting his ballot during a referendum in Athens, Greece, July 5, 2015. REUTERS/Jean-Paul Pelissier
A child casts her grandmother's ballot during a referendum vote in Athens, Greece, July 5, 2015. REUTERS/Marko Djurica
A woman enters a voting station before casting her ballot during a referendum in Athens, Greece, July 5, 2015. REUTERS/Jean-Paul Pelissier
Voting officials are seen inside a polling station during a referendum in Athens, Greece, July 5, 2015. REUTERS/Marko Djurica
Athenians are seen inside polling booths at a school in Athens, Greece July 5, 2015. REUTERS/Yannis Behrakis
A man enters a polling station to cast his ballot during a referendum vote in Athens, Greece, July 5, 2015. REUTERS/Marko Djurica
A Greek Orthodox priest exits a booth holding a ballot at a polling station in Athens, Greece July 5, 2015. REUTERS/Yannis Behrakis
A Greek Orthodox priest exits a booth holding a ballot at a polling station in Athens, Greece July 5, 2015. REUTERS/Yannis Behrakis
A man raises his arms as he leaves a polling booth before casting his ballot during a referendum vote in Athens, Greece, July 5, 2015. REUTERS/Jean-Paul Pelissier
A man leaves a polling booth to cast his ballot during a referendum vote in Athens, Greece, July 5, 2015. REUTERS/Marko Djurica
A woman casts her ballot during a referendum vote in Athens, Greece, July 5, 2015. REUTERS/Jean-Paul Pelissier

The astonishingly strong victory by the 'No' camp overturned opinion polls that had predicted an outcome too close to call. It leaves Greece in uncharted waters: risking financial and political isolation within the euro zone and a banking collapse if creditors refuse further aid.

But for millions of Greeks the outcome was an angry message to creditors that Greece can longer accept repeated rounds of austerity that, in five years, had left one in four without a job. Prime Minister Alexis Tsipras has denounced the price paid for aid as "blackmail" and a national "humiliation".

Greece's finance minister Yanis Varoufakis said the 'No' vote was a vote in favour of democracy and social justice that allowed Athens to call on its partners to find a fair deal.

"As of tomorrow, with this brave 'No' the Greek people handed us.... we will extend a helping hand towards our lenders. We will call on each one of them to find common ground," Varoufakis told reporters. "As of tomorrow, Europe, whose heart is beating in Greece tonight, is starting to heal its wounds, our wounds. Today's No is a big Yes to democratic Europe.

Greek Prime Minister Alexis Tsipras votes at a polling station in Athens, Greece July 5, 2015. Photo: REUTERS/Alkis Konstantinidis
Greek Prime Minister Alexis Tsipras votes at a polling station in Athens, Greece July 5, 2015. Photo: REUTERS/Alkis Konstantinidis
Greece's Finance Minister Yanis Varoufakis speaks to the assembled media as he leaves his office in Athens, Wednesday, July 1, 2015. (AP Photo/Daniel Ochoa de Olza)

However, German Economy Minister Sigmar Gabriel told the Tagesspiegel daily that it was hard to imagine talks on a new bailout programme with Greece after the result.

"With the rejection of the rules of the euro zone ... negotiations about a programme worth billions are barely conceivable," said Gabriel, leader of the Social Democrats (SPD) who share power with Chancellor Angela Merkel's conservatives.

"Tsipras and his government are leading the Greek people on a path of bitter abandonment and hopelessness," he said, adding Tsipras had "torn down the last bridges on which Greece and Europe could have moved towards a compromise".

European Council President Donald Tusk called a euro zone summit for Tuesday to discuss the Greek debt crisis after Greeks voted overwhelmingly on Sunday to reject the terms of a bailout.

"I have called a EuroSummit Tuesday evening at 1800 (1600 GMT) to discuss situation after referendum in Greece," Tusk said on Twitter.

European Commission President Jean-Claude Juncker will hold a conference call with Tusk, Eurogroup President Jeroen Dijsselbloem and European Central Bank President Mario Draghi on the Greek situation on Monday morning, the Commission said.

As the No side celebrated a resounding victory the main opposition New Democracy leader Antonis Samaras resigned. Samaras requested the party's  former Parliament President Evangelos Meimarakis lead the party in the interim.

Hundreds of Greeks began pouring into the central Syntagma square in front of parliament to celebrate, after a week of building desperation as banks were shut and cash withdrawals rationed to prevent a collapse of the Greek financial system.

"This is an imprint of the will of the Greek people and now it's up to Europeans to show if they respect our opinion and want to help," said Nikos Tarasis, a 23-year-old student.

Read more: The human cost: ‘We’d like more children... it is out of the question now’

Officials from the Greek government, which had argued that a 'No' vote would strengthen its hand to secure a better deal from international creditors after months of wrangling, immediately said they would try to restart talks with European partners.

"I believe there is no Greek today who is not proud, because regardless of what he voted he showed that this country above all respects democracy," Labour Minister Panos Skourletis said.

"The government now has a strong mandate, a strong negotiating card, to bring a deal which will open new ways."

But euro zone officials shot down any prospect of a quick resumption of talks. One official said there were no plans for an emergency meeting of euro zone finance ministers on Monday, adding the vote outcome meant the ministers "would not know what to discuss".

Many of Athens' partners have warned over the past week that a 'No' vote would mean cutting bridges with Europe and driving Greece's crippled financial system into outright bankruptcy, dramatically worsening the country's economic depression.

The result also delivers a hammer blow to the European Union's grand single currency project. Intended to be permanent and unbreakable when it was created 15 years ago, the euro zone could now be on the point of losing its first member with the risk of further unravelling to come.

"I believe such a result can be used as a strong negotiating tool so that Europeans can understand that we are not a colony," said Nefeli Dimou, a 23-year-old student in Athens.

Read more: Brian Hayes says outline of Greek deal is clear

Greek banks, which have been closed all week and rationing withdrawals from cash machines, are expected to run out of money within days unless the European Central Bank provides an emergency lifeline. Finance Minister Yanis Varoufakis is due to meet top Greek bankers later on Sunday and State Minister Nikos Pappas, one of Prime Minister Alexis Tsipras's closest aides, said it was "absolutely necessary" to restore liquidity to the banking system now that the vote is over.

However the European Central Bank, which holds a conference call on Monday morning, may be reluctant to increase emergency lending to Greek banks after voters rejected the spending cuts and economic reforms which creditors consider essential to make Greek public finances viable, central bankers said.

First indications were that any joint European political response may take a couple of days. German Chancellor Angela Merkel and French President Francois Hollande will meet in Paris on Monday afternoon. The European Commission, the EU executive, meets in Strasbourg on Tuesday and will report to the European Parliament on the situation.

"EU leaders must get together immediately, even on Monday. The situation is too serious to leave to finance ministers," said Axel Schaefer, a deputy head of the Social Democrat (SPD) group in the German parliament.

"You have to have confidence in the ability of the ECB to act. We must use all the possibilities in the EU budget to help Greece, which is still a member of the euro and the EU."

Read more: A No vote would not be the end of problems for Syriza and Tsipras

A 'No' vote puts Greece and the euro zone in uncharted waters. Unable to borrow money on capital markets, Greece has one of the world's highest levels of public debt. The International Monetary Fund warned last week that it would need massive debt relief and 50 billion euros in fresh funds.

Greek officials see the IMF report as a vital support for their argument that the bailout terms as they stood would merely have driven Greece further into depression.

Tsipras called the referendum eight days ago after rejecting the tough terms offered by international creditors as the price for releasing billions of euros in bailout funds.

He denounced the bailout terms as an "ultimatum" and his argument that a 'No' vote would allow the government to get a better deal appears to have convinced many Greeks, particularly among younger voters who have been ravaged by unemployment levels of nearly 50 percent.

"I have been jobless for nearly four years and was telling myself to be patient," said 43-year-old Eleni Deligainni, who said she voted 'No'. "But we've had enough deprivation and unemployment."

Opinion polls over the months have shown a large majority of Greeks want to remain in the euro.

But, exhausted and angry after five years of cuts, falling living standards and rising taxes imposed under successive bailout programmes, many appear to have shrugged off the warnings of disaster, trusting that a deal can still be reached.

Read more: Greek finance minister's gamble - vows he will resign if 'Yes' vote wins

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