Wednesday, July 1, 2015

Greece debt crisis: PM Alexis Tsipras backs no vote as country's default on IMF loan looms

By Europe correspondent Mary Gearin and wires Tuesday 30 June 2015

Protest in Athens Photo: Thousands of protesters gather in front of the Greek parliament in Athens to say no to the latest offer of a bailout deal. (AFP: Louisa Gouliamaki)

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Map: Greece

Tens of thousands of Greeks have rallied to back their left-wing government's rejection of a tough international bailout after a clash with foreign lenders pushed Greece close to financial chaos and forced a shutdown of its banking system.

With a popular referendum on the bailout planned for Sunday, prime minister Alexis Tsipras put his own position on the line, saying he would respect the result of the vote but would not lead a government to administer "austerity in perpetuity".

"If the Greek people want to have a humiliated prime minister, there are a lot of them out there. It won't be me," he said in an interview on Greek state television as one of the biggest rallies seen in Athens in years was taking place.

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Mr Tsipras said the referendum would be the basis of future negotiations with Europe and that a strong no vote was needed to establish a strong bargaining position.

"Our aim is for the referendum to be followed by negotiations for which we will be better armed," he said, dismissing fears a no vote would lead to a so-called Grexit.

The show of defiance came at the end of a day that started with stunned Greeks waking up to face shuttered banks, long supermarket lines and overwhelming uncertainty over Greece's future in the Eurozone.

European leaders and policy makers, wrong-footed by Mr Tsipras's shock announcement of the referendum last weekend, warned that it would be a plebiscite on Greece's future as a member of the single currency.

With Greece hours away from defaulting on a 1.6 billion euro loan from the International Monetary Fund, the crisis has escalated quickly.

US and European markets were savaged overnight on investor fears the debt crisis would spreadto other vulnerable Eurozone economies, with Wall Street posting its worst result this year.

Ratings agency Standard and Poor's, meanwhile, cut Greece's sovereign debt rating one notch further into junk levels to CCC-, saying there was a 50 per cent probability it would leave the euro zone.

Greeks — used to seeing lengthy talks with creditors end with an 11th-hour deal — were shocked by the turn of events.

The government has imposed capital controls and ordered its banks to stay closed for a week in a bid to prevent a run on banks, after bailout talks collapsed at the weekend.

Greece's repayment schedule
  • June 30: IMF repayment, 1.5 billion euros
  • July 10: Greek Treasury T-bill redemption, 2 billion euros
  • July 13: IMF repayment, 450 million euros
  • July 17: Greek T-bill redemption, 1 billion euros
  • July 20: ECB and national central banks repayments, 3.5 billion euros
  • August 1: IMF coupon payment, 175 million euros
  • August 7: Greek T-bill redemption, 1 billion euros
  • August 20: ECB and national central banks repayments, 3.2 billion euros
  • September 4: IMF repayment, 300 million euros
  • September 4: Greek T-bill redemption, 1.4 billion euros

Mr Tsipras implied Greece would default on the International Monetary Fund loan.

"[How] is it possible the creditors are waiting for the IMF payment while our banks are being suffocated?" he said.

"Once they decide to stop the suffocation, they will be paid."

Mr Tsipras said he stood ready to talk to European leaders. If they were to offer a deal, he said, Greece would pay its debt.

"My phone is on all day long. Whoever calls, I always pick up."

Both German chancellor Angela Merkel and Euro group head Jeroen Dijsselbloem said on Monday that further talks with Greece were possible.

But European Council president Donald Tusk told Mr Tsipras that he saw no willingness among EU nations to agree to Athens' request to a month's extension to bailout loans.

EU Commission president Jean-Claude Juncker, meanwhile, said he felt personally betrayed and encouraged Greeks to vote yes at the referendum.

"You mustn't commit suicide because you are afraid of death," Mr Juncker said in a comment widely condemned on social media as tasteless.

The number of suicides linked to austerity rose by more than 30 per cent in just the early years of the Greek recession.

Thousands of anti-bailout demonstrators rally in Greece

In Syntagma Square in the centre of Athens, thousands of people rallied in front of parliament for a no vote.

Many banners declared simply "No!" while others said "Our lives do not belong to the lenders" and "Don't back down".

Protesters participate in a demonstration calling for a No vote Photo: Protesters participate in a demonstration calling for a No vote in the forthcoming referendum on bailout conditions set by the country's creditors. (AFP: Aris Messinis)

"They don't really care about Greece. They care only about their profits, they don't care for us," one woman told the ABC.

"The worst thing is not that we lost part of our income or that we pay higher taxes but it is that we lost our hope. This is how I feel."

Queues have formed at ATMs as they dispense a maximum of 60 euros, one of the restrictions to prevent a run on banks.

Maria, an engineer, was right behind the government's rejection of austerity.

"I'm young and I want to live in a country that has hope and can prosper and can give me work and make me feel independent. Al least, with some dignity," she said.

"I think that my biggest fear, above all fears, is to live all my productive years unpaid, bad jobs, bad salaries," she said of Greece exiting the Eurozone.


From other news sites:

Greece debt crisis: PM Alexis Tsipras backs no vote as country's default on IMF loan looms - ABC News (Australian Broadcasting Corporation)