Sat 4 July 2015
Greek debt crisis: Prime minister Alexis Tsipras demands debt write-off, 'grace period' for repayments as rival rallies fill streets
Greece's prime minister Alexis Tsipras has demanded creditors forgive a third of the country's debt and asked for delayed repayments for the rest, as thousands of Greeks took to the streets in rival rallies that laid bare the deep divide heading into the referendum.
Mr Tsipras, elected in January on a promise to end six years of austerity, extolled a packed Syntagma square in central Athens to spurn the tough terms of an aid deal offered by international creditors to keep the country afloat.
In a televised statement he also defended tomorrow's referendum, which he hopes will reset bailout negotiations with his European creditors.
Video: Greek voters are evenly divided ahead of the referendum on austerity measures insisted on by Europe (7.30)
The vote is "a time of responsibility and democracy meant to silence the sirens of destruction," he said.
Mr Tsipras called for creditors to accept "a 30 per cent haircut" on the country's massive mountain of debt and wants a 20-year "grace period" on repaying the remainder.
He rejected EU leaders' assertions that his decision last week to curtail debt talks with the creditors — the International Monetary Fund, the European Commission and the European Central Bank — and call the vote risked Greece's Eurozone or EU membership.
"Rejecting an unsustainable agreement does not mean a break with Europe," he said.
"We will face a common future on Monday and we will not allow anything to divide us."
Greek finance minister Yanis Varoufakis has promised banks would reopen on Tuesday if a new deal is agreed quickly. The Union of Greek Banks said on Friday its members had enough liquidity until then.
Thousands rally in a divided Athens
On Syntagma, patriotic songs blared out over loud speakers. At the "Yes" camp, thousands rallied in front of the old Olympic Stadium to Beethoven's Ode to Joy, the anthem of the European Union.
There appeared to be fewer people than in the "No" crowd.Berenberg Bank chief economist Dr Holger Schmieding says a Greek return to the drachma would trigger hyperinflation in the country and may see the rise of far-right and far-left parties.
"I prefer to vote 'Yes', have a few more years austerity and give my child a better future," said jobless economist Marina Peppa, 45.
"It's not going to be easy, but if 'No' prevails we'll have Armageddon, total poverty."
With tension building, police firing stun grenades briefly scuffled with a few dozen black-clad people carrying red flags, often carried by anti-establishment radicals. The violence appeared to be isolated.
Latest opinion polls show Greeks continue to be divided about the bailout terms.
The Greek government believes rejecting the bailout conditions would strengthen its hand in negotiations with creditors.
But support for the "No" camp sharply slid this week as Greeks struggled under capital controls reducing ATM withdrawals to 60 euros ($87) a day.
European Commission president Jean-Claude Juncker said a "No" vote in the referendum would dramatically weaken Greece's position in debt negotiations but declined to say whether creditors would re-open negotiations if that happens.
A heartbreaking photograph of an elderly man collapsed on the ground openly crying in despair outside a Greek bank has captivated people around the world.
"If the Greeks will vote 'No', the Greek position is dramatically weakened," Mr Juncker told a news conference, adding it would still be difficult even in the event of a "Yes" vote.
Mr Tsipras is betting Europe will compromise rather than let Greece slip out of the Eurozone, even though the continent's leaders say a "No" vote would signal its exit.
But behind the rhetoric, there were more concrete signs of the pressure Europe can exert on Greece.
The country's total debt load stands at a staggering 323 billion euros ($477 billion), three-quarters of it owed to its troika of creditors.
Earlier this week, Greece became the first developed economy to fall in arrears to the IMF when it missed a 1.5 billion euro loan repayment.
Many confused by referendum question
Greece's top administrative court ruled the referendum could go ahead after rejecting a challenge by two citizens who argued its question was confusing and unconstitutional.
However, the question being put to Greek voters has stumped many.
It reads: "Should the deal draft that was put forward by the European Commission, the European Central Bank and the International Monetary Fund in the Euro group of June 25, 2015, and consists of two parts, that together form a unified proposal, be accepted?"
"The first document is titled 'Reforms for the Completion of the Current Programme and Beyond' and the second 'Preliminary Debt Sustainability Analysis.'"
Eurozone officials have firmly said that the "deal" referred to in the question expired on Tuesday.