Greece in limbo as Europe awaits vote
GREECE braced for more chaos on the streets outside its mostly shuttered banks yesterday, as Athens and its creditors halted talks on resolving the country’s deepening financial crisis until a referendum this weekend.
Banks have been closed all week, although a few have been reopened to help pensioners without ATM cards.
The European Central Bank left the terms of its emergency $ 100 billion cash support to Greece unchanged, a day after Athens slipped into arrears with the International Monetary Fund and its bailout program expired.
The move kept chances alive for a settlement between Greece and creditors. And Finance Minister Yanis Varoufakis publicly thanked the ECB and its president, Mario Draghi, for the decision.
“This allows us to breathe. It’s a very positive move and a move of good will on the part of the European Central Bank. I welcome it,” Mr Varoufakis said.
Mr Draghi, he said, had faced down “hawks” among eurozone members who had demanded that Athens increase collateral needed to receive continued assistance.
Asian stock markets advanced after gains on Wall Street as strong US payroll data overshadowed worries about the Greek crisis.
Greece is seeking a third bailout from the eurozone rescue fund after the previous deal expired this week without agreement on the terms of final payouts.
The impasse left billions in bailout money frozen or cancelled and saw Greece forced to close banks and its stock market for at least a week while the country’s left- wing government called a referendum urging voters to denounce the deal offered by creditors.
Eurozone finance ministers decided to put the talks with Greece on hold until the vote.
“Given the political situation, the rejection of previous proposals, the referendum which will take place on Sunday, and the recommendation by the Greek Government to vote ‘ No,’ we see no grounds for further talks at this point,” Dutch Foreign Minister and eurogroup chairman Jeroen Dijsselbloem said.
In Athens, crowds of anxious elderly Greeks thronged banks on Wednesday beginning before dawn, struggling to withdraw their maximum of 120 euros ($ 134) for the week after the Government reopened some banks to help pensioners whoh d don’t’ t have bank cards.
“It’s very bad,” said retired pharmacy worker Popi Stavrakaki, 68. “I’m afraid it will be worse soon. I have no idea why this is happening.”
Business associations and the country’s largest labour union urged the Government to cancel the vote.
And the Council of Europe – an independent body that monitors elections and human rights – said the referendum would fall short of international standards.
In a sign of serious financial deterioration, Greece suffered another sovereign downgrade, the fourth this week, as Moody’s slashed the country’s rating from Caa2 to Caa3, or just above default.
German Chancellor Angela Merkel said a deal remained impossible before the referendum, while French President Francois Hollande said creditors should seek an accord before then.
“We have to be clear. An accord is for right now, it will not be put off,” Mr Hollande said.
ON THE BRINK: Pensioners line up outside a National Bank branch in Athens, Greece, hoping to be able to withdraw a small amount t of cash; ( inset) Greek Prime Minister Alex Tsipras.