Greece debt crisis: Greek voters reject bailout offer

Greece debt crisis: Greek voters reject bailout offer


Greek voters have decisively rejected the terms of an international bailout.

The final result in the referendum, published by the interior ministry, was 61.3% “No”, against 38.7% who voted “Yes”.

Greece’s governing Syriza party had campaigned for a “No”, saying the bailout terms were humiliating.

Lady at an ATM

Lady at an ATM



Their opponents warned that this could see Greece ejected from the eurozone, and a summit of eurozone heads of state has now been called for Tuesday.

Greek Prime Minister Alexis Tsipras said late on Sunday that Greeks had voted for a “Europe of solidarity and democracy”.

Referendum as it happened

“As of tomorrow, Greece will go back to the negotiating table and our primary priority is to reinstate the financial stability of the country,” he said in a televised address.

“This time, the debt will be on the negotiating table,” he added, saying that an International Monetary Fund assessment published this week “confirms Greek views that restructuring the debt is necessary”.

But some European officials had said that a “No” would be seen as an outright rejection of talks with creditors.

Jeroen Dijsselbloem, who heads the eurozone’s group of finance ministers, said the referendum result was “very regrettable for the future of Greece”.

Germany’s Deputy Chancellor, Sigmar Gabriel, said renewed negotiations with Greece were “difficult to imagine”.

Mr Tsipras and his government were taking the country down a path of “bitter abandonment and hopelessness”, he told the Tagesspiegel daily.

Greece had been locked in negotiations with its creditors for months when the Greek government unexpectedly called a referendum on the terms it was being offered.

Banks have been shut and capital controls in place since last Monday, after the European Central Bank declined to give Greece more emergency funding.

Withdrawals at cash machines have been limited to €60 per day. Greece’s latest bailout expired on Tuesday and Greece missed a €1.6bn (£1.1bn) payment to the IMF.

Greek banks are desperately in need of a lender of last resort to save them, and the Greek economy.

And sad to say no banker or central banker to whom I have spoken believes the European Central Bank (ECB) can fulfil that function – because it is struggling to prove to itself that Greek banks have adequate assets to pledge to it as security for new loans.

There are only two options. The Bank of Greece could make unsecured loans to Greek banks without the ECB’s permission – which would provoke a furious reaction from Eurozone leaders and would be seen by most of them as tantamount to leaving the euro.

Or it can explicitly create a new currency, a new drachma, which it could then use to provide vital finance to Greek banks and the Greek economy.

Greece on verge of euro exit


Greek government officials have insisted that rejecting bailout terms would strengthen their hand, and that they could rapidly strike a deal for fresh funding in resumed negotiations.

Finance Minister Yanis Varoufakis has said that with a “No” vote, Greek banks would reopen on Tuesday.

He was due to meet senior Greek bankers late on Sunday. State Minister Nikos Pappas, a close ally of Mr Tsipras, said it was “absolutely necessary” to restore liquidity to the banks now the referendum was over.

Summit called

Some European officials sounded conciliatory after the vote.

Italian Foreign Minister Paolo Gentiloni tweeted: “Now it is right to start trying for an agreement again. But there is no escape from the Greek labyrinth with a Europe that’s weak and isn’t growing.”

Belgium’s finance minister said the door remained open to restart talks with Greece “literally, within hours”.

Eurozone finance ministers could again discuss measures “that can put the Greek economy back on track and give the Greeks a perspective for the future,” he told the VRT network.

European Commission President Jean-Claude Juncker said he was consulting the leaders of eurozone member states, and would have a conference call with key EU officials and the ECB on Monday morning.

French President Francois Hollande and German Chancellor Angela Merkel are scheduled to meet in Paris on Monday. A summit of eurozone heads of state has been called for Tuesday.

The European Commission – one of the “troika” of creditors along with the IMF and the ECB – wanted Athens to raise taxes and slash welfare spending to meet its debt obligations.

Greece’s Syriza-led government, which was elected in January on an anti-austerity platform, said creditors had presented it with an “ultimatum”, using fear to put pressure on Greeks.

The Greek government’s opponents and some Greek voters had complained that the question in Sunday’s referendum was unclear. EU officials said it applied to the terms of an offer that was no longer on the table.

The turnout in Sunday’s referendum was 62.5%.

As the result became clear, former Prime Minister Antonis Samaras, who had campaigned for a “Yes” vote in the referendum, resigned as leader of the centre-right New Democracy party. – BBC News


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