Defiant PM rejects Grexit fears as he rallies ‘No’ vote

ATHENS, Greece – Greece’s Prime Minister Alexis Tsipras got a rock-star welcome at an Athens rally Friday, July 3 as he sought to revive support for a “No” vote in a referendum called to strengthen his hand in talks with international creditors.

His typically charismatic turn on the stage came as the latest polls suggested the July 5 plebiscite on Greece’s latest bailout offer was too close to call, with the EU nation of 11 million people evenly divided.

Countering EU leaders’ warnings that a “No” could cause Greece to crash out of the eurozone, Tsipras told the crowd of 25,000 cheering supporters: “We are not simply deciding to remain in Europe – we are deciding to live with dignity in Europe.

“I call on you to say ‘No’ to ultimatums and to turn your back on those who would terrorize you,” the 40-year-old leader said. “No one can ignore this passion and optimism.”

Just 800 meters (yards) away, separated by police with riot shields, a rival rally of 20,000 “Yes” supporters shouted pro-European slogans and voiced fears of a so-called “Grexit” from the eurozone if Tsipras got his way.

“They cannot pretend any longer that it’s not about leaving the euro,” said a 43-year-old doctor who gave his first name as Nikos. “And outside the euro lies only misery.”

“It cannot go on like this. Our government is a liability,” said George Koptopoulos, a 70-year-old retired university professor.

Many Greeks have jumped into the “Yes” camp since capital controls were imposed this week limiting daily ATM withdrawals to just 60 euros ($67) after Greece’s international aid package ran out on Tuesday, June 30.

Adding to the sense of crisis, a eurozone emergency fund officially declared Greece to be in default on Friday for not making a 1.5-billion payment to the International Monetary Fund loan this week.

Declared default

Greece’s single biggest creditor, the European Financial Stability Facility (EFSF) said, however, it was not yet demanding immediate repayment of loans worth 145 billion euros ($160 billion).

The two latest voter intention polls showed growing support for a “Yes” compared to previous surveys.

An Alco institute poll Friday found 44.8% of Greeks intend to vote “Yes” and 43.4% are for “No”, while a Bloomberg survey for Greece’s Macedonia University showed 43% would vote “No” and 42.5% “Yes”.

Greece’s top administrative court ruled late Friday the referendum could go ahead after rejecting a challenge by two citizens who argued its question was confusing and unconstitutional.

Tsipras says the referendum is needed to force creditors to finally accept his key demand of another round of debt relief to save Greece from financial meltdown and possibly crashing out of the euro.

Greece, he says, needs to trim its suffocating 323-billion-euro debt burden by having creditors forgive 30% of what they are owed and allowing a 20-year grace period for repaying the rest.

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 Friday its members had enough liquidity until then.

But European Commission chief Jean-Claude Juncker warned in Brussels that Greece’s negotiating position, far from being strengthened, would be “dramatically weakened” in the event of a “No” – and still difficult even in the event of a “Yes” vote.

German Finance Minister Wolfgang Schaeuble, known for his tough line against Athens’s leaders, said it was clear Greece’s leftist leaders did not really want any reform program.

“Only the Greeks” can now decide if they want to stay in the eurozone, he told German daily Bild, adding that “one thing is clear: we will not abandon the Greek people”.

On Greece’s streets, the cash rationing has led many to despair, especially pensioners who have been allowed a one-off over-the-counter withdrawal of 120 euros if they don’t have a bank card.

In the second-biggest city of Thessaloniki, one 77-year-old man unable to withdraw his money crumpled to the ground, scattering his papers.

“I am a sensitive person,” the man, George Chatzifotiadi, explained later to Agence France-Presse. “I cannot stand to see my country in this situation.”

In Athens, another pensioner, Kostas, has been regularly withdrawing his and wife’s daily euro limits for fear they might be seized by the government or converted to drachmas. “My money is safer at home,” he said.

Many cash machines were running short of denominations, allowing only the withdrawal of a 50-euro note.

Confusing question

The referendum question being put to Greek voters has stumped many.

The question reads: “Should the deal draft that was put forward by the European Commission, the European Central Bank and the International Monetary Fund in the Eurogroup 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 Program and Beyond’ and the second ‘Preliminary Debt Sustainability Analysis’.”

Eurozone officials have firmly said that the “deal” referred to expired on Tuesday.

Europe’s main stock markets slipped lower Friday as all eyes turned to Greece’s referendum and what that might mean to investors at the beginning of next week. The risk of contagion to other eurozone nations, however, appeared remote. (READ: Europe ejects Greek bailout extension after referendum shock)

The consensus among analysts was that, either way, the referendum’s result would likely not change much in the talks.

Finance minister Varoufakis on Saturday, July 4 slammed a Financial Times report that suggested Greek savers could lose 30% of their bank deposits to shore up their country’s banking system as a “malicious rumor”.

The British business daily, quoting unidentified bankers and businessmen close to negotiations, had reported that Greek depositors with over 8,000 euros ($8,900) in an account may be force to take a “haircut”.

Investment company BNY Mellon said in an investor note that “we might well see the Greek government and its creditors simply resume their all too familiar and intractable stand-off” following the referendum.

Holger Schmieding, chief economist at Germany’s Berenberg bank, said: “A Greek ‘No’ could turn into a tragedy for Greece -– but it would not be a significant threat for the eurozone as a whole.” – Rappler.com