GREEK FINANCIAL CRISIS: WHAT HAPPENS NOW
TO a cacophony of car horns, spontaneous singing and the frantic waving of national flags, Greeks have resoundingly said “No” to the terms of an international bailout.
At Syntagma Square, Athens, thousands celebrated the referendum vote, which analysts believe may lead Greece to abandon the euro currency and leave the EU.
Leaving the euro would have a profound effect on world markets and increase fears the EU is unravelling.
“No” secured 61.3 per cent of the vote and the result caused panic in Germany, Greece’s largest creditor. Its central bank warned billions of euros could be wiped off its budget and furthered fears Europe’s make- up could be irreparably damaged if the Grexit happens.
The euro fell 1.6 per cent to $ US1.0963 in electronic trading before Asian markets opened, with European markets also down. The Australian dollar also suffered from the flight to the safety of the greenback, sliding to a sixyear low of US74.52c.
It was a high- stakes gamble for Prime Minister Alexis Tsipras and his leftist Syriza Party, as he threatened to step down and force new elections if the country voted “Yes”. But instead he won a mandate to relaunch demands for further multibillion- euro aid packages even though the International Monetary Fund has rejected that notion and there appears to be no basis for the European Central Bank to lend more.
“Given the unfavourable conditions, you have made a very brave choice,” he told the Greek people via television.
There is no clear path to further European aid, with many simply seeing the result as an end to austerity and being answerable to the “demands” of EU creditors.
Celebrations in Syntagma Square, which faces the Greek parliament, began shortly after 9pm local time as the “No” vote surged ahead in what had been expected to be a close- run thing.
“We are free,” one woman
chanted as others linked arms, danced and sang. Others chanted “Oxi, oxi” (“No, no”) over and over, with food and flag stalls adding to the carnival atmosphere.
Tsipras declared the win a clear mandate for new Greek requests for help as early as today from Europe, with less stringent conditions attached.
German Chancellor Angela Merkel, who has accused Mr Tsipras of driving his nation “into the wall”, was meeting French counterpart Francois Hollande in Paris yesterday to discuss the result and call for a special eurozone summit today.
The ECB will also hold an emergency meeting to look at likely scenarios, with Greek banks already requesting emergency funds.
Likely to be discussed was Mr Tsipras’s call for the IMF, ECB and European Commis- sion to wipe 30 per cent off the € 240 billion ($ 353 billion) they have loaned Greece over the past five years and allow it a 20- year grace period before it starts repaying the rest.
Germany’s Economy Minister Sigmar Gabriel said it was hard to imagine new bailout discussions with a country that rejected bailout terms.
“Tsipras and his Government are leading the Greek people on a path of bitter abandonment and hopelessness,” he said, adding the PM had “torn down the last bridges on which Greece and Europe could have moved towards a compromise”.
Greece’s Finance Minister, dual Greek- Australian national Yanis Varoufakis, will play no further part in any negotiations after resigning yesterday.
“Soon after the announcement of the referendum re- sults, I was made aware of a certain preference by some Eurogroup participants, and assorted ‘ partners’, for my ... ‘ absence’ from its meetings,” Varoufakis said on his blog.
It was “an idea that the Prime Minister judged to be potentially helpful to him in reaching an agreement”.
Outspoken and flamboyant Varoufakis, added: “I shall wear the creditors’ loathing with pride.”
PRIME MOVER: Prime Minister Alexis Tsipras ( inset) speaking to the media after casting his vote on the austerity measures, and flag- waving supporters of the ‘‘ No’’ vote celebrating in Athens ( main).