Thursday 23 November 2017

Greek finance minister accuses lenders of trying to 'terrorise' his country

Banks have 'adequate liquidity' only until tomorrow night

Yanis Varoufakis
Yanis Varoufakis

Szu Ping Chan and Tara Cunningham

Greece's finance minister has accused lenders of trying to "terrorise" the country into submitting to harsh austerity, as the nation remained divided over today's referendum on European bailout proposals that will decide its future in the eurozone.

As the chairman of Greece's national bank admitted that cash machines would start to run dry within hours of tonight's referendum result, Yanis Varoufakis said the single currency bloc faced a €1trn rupture if banks were denied vital liquidity next week.

"If Greece crashes, a trillion euros will be lost. It's too much money and I don't believe Europe could allow it," he told Spanish newspaper El Mundo.

"What they're doing with Greece has a name: terrorism. What Brussels and the Troika want today is for the Yes [vote] to win so they could humiliate the Greeks."

Mr Varoufakis also dismissed as "malicious" reports that the Greek government was preparing to raid bank accounts to shore up its finances.

It came as Wolfgang Schaeuble, Germany's finance minister, suggested that Greece could temporarily exit the eurozone. "Greece is a member of the eurozone. There's no doubt about that. Whether with the euro or temporarily without it: only the Greeks can answer this question."

He told Bild newspaper that Europe stood ready to help Greece in the event of a humanitarian crisis. "It is clear that we will not leave the people in the lurch," he said. Martin Schultz, the president of the European Parliament, added that Brussels was ready to extend emergency loans to Greece to prevent vital public services from collapse.

However, Mr Schultz said a No vote would make the situation more difficult. "Without new money, salaries cannot be paid out, the health care system does not work, power supplies and public transport will fail and essential goods cannot be imported because they cannot pay [for them]."

Louka Katseli, chairman of the National Bank of Greece, said on Friday that Greek banks would only have "adequate" liquidity until the end of tomorrow night.

Ed Miliband, the former British Labour leader, also weighed into the debate. He tweeted that the eurozone was in "denial" about the need to restructure Greece's €330bn debt pile and accused creditors of trying to "bully" the country into submission.

Global stock markets are braced for another tumultuous period after a week in which equity and other markets were rocked by the events in Brussels and Athens.

Following Greece's failure to pay the €1.6bn owed to the International Monetary Fund last Tuesday, investors anxiously await the outcome of today's referendum.

An initial result is expected at around 7pm, Irish time. European markets face grave vulnerabilities, entering potentially uncharted territory when they open for trading tomorrow morning.

The Greek debt crisis has reinjected volatility into equity markets.

On Friday the VSTOXX, a closely watched gauge of European stock market volatility, hit its highest level since last October's torrid worldwide market sell-off.

© Telegraph

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