Greece on edge before vote
Greek Prime Minister Alexis Tsipras vowed Wednesday to press ahead with a controversial bailout referendum as European leaders ruled out any fresh debt offer before Sunday’s vote.
Meantime, Moody’s cut its credit rating for the embattled country to deepjunk “Caa3” Wednesday, warning it is now less likely that official creditors will support the country, whatever happens in Sunday’s referendum on accepting a recast EU rescue plan.
Greece entered uncharted territory with its default on a 1.5 billion euro International Monetary Fund loan, the first by an advanced economy, and expiry of its current European bailout on Tuesday.
It is now without external financial assistance for the first time in five years.
Hours after Greece became the first advanced economy to default on an IMF repayment, Tsipras used a live TV address to urge Greeks to vote ‘No’ on Sunday to creditors’ current demands.
The leftist leader, at loggerheads with Greece’s creditors since his election in January, insisted a ‘No’ vote would “not signify a rupture with Europe” despite efforts by EU leaders to cast it as a referendum on Greece’s place in the bloc.
A “No” vote on Sunday, Moody’s said, “would likely increase the risk of exit from the euro area which would impose significant losses on private sector creditors.” Greece on Tuesday made a lastminute proposal for a third bailout worth nearly 30 billion euros ($33 billion) to follow the two rescue programs worth 240 billion euros that cash strapped Athens has received since 2010.
Frustrated eurozone finance ministers agreed Wednesday to wait until after the referendum before holding any more talks, saying there were “no grounds” for further discussions.
Capital controls imposed this week meant most Greeks were still only allowed to withdraw 60 euros per day.
But nearly 1,000 banks reopened Wednesday to let elderly people draw a limited amount from their pensions, prompting chaotic scenes.
“I worked for 50 years on the sea and now I am a beggar for 120 euros,” one pensioner in Athens said. “I have no money for medication for my wife, who had an operation and is ill.”