Greece’s tur­moil a risk to se­cu­rity

REF­ER­EN­DUM RE­SULT WILL AF­FECT E.U. POL­ICY

The Washington Post Sunday - - FRONT PAGE - BY MICHAEL BIRNBAUM AND GRIFF WITTE

Re­gion faces mi­grant cri­sis, Ukraine war, Is­lamist threat

athens — Tucked in a tough cor­ner of Europe, Athens has been bat­tling for­eign in­va­sions at least as long as records can tell the tale. So as this deeply di­vided na­tion pre­pares for a Sun­day vote about whether to swal­low more painful aus­ter­ity from Europe, the con­se­quences of the out­come run far be­yond whether Greece will re­ceive a new fi­nan­cial life­line.

In a Europe that is com­ing un­moored from a post-Cold War or­der that ap­peared sta­ble just a few years ago, the out­come of Greece’s de­ci­sion is cer­tain to in­flu­ence how Euro­pean Union lead­ers han­dle the vast se­cu­rity chal­lenges that stretch be­fore them. An un­prece­dented mi­grant cri­sis, a war in Ukraine and a grow­ing threat of Is­lamist mil­i­tancy have shaken the 28-na­tion al­liance, as na­tion­al­ism and eco­nomic pop­ulism surge in many cap­i­tals.

As Greeks go to polling places Sun­day for a his­toric ref­er­en­dum, the coun­try’s in­sta­bil­ity is bound to per­sist no mat­ter the out­come. With food sta­ples dwin­dling in su­per­mar­kets, gas sta­tions run­ning low on fuel and nearly all im­ports grind­ing to a tem­po­rary halt, Greece will need help from far be­yond its borders as it wakes up Mon­day morn­ing to life af­ter the de­ci­sion, lead­ers here said.

ATHENS — Af­ter five months of bit­ter back­room talks and poi­sonous public smack-downs be­tween of­fi­cials in Greece and Europe, the fate of this na­tion-on-the-brink will shift into the hands of the Greek peo­ple on Sun­day.

A sub­stan­tial ma­jor­ity of vot­ers in the coun­try of 11 mil­lion are ex­pected to turn out for a ref­er­en­dum that will ask them to an­swer ei­ther yes or no to a jar­gon sat­u­rated ques­tion about Europe’s now-ex­pired bailout of­fer.

Although the bal­lot doesn’t say so, Greece’s fu­ture in Europe, the sur­vival of its gov­ern­ment and the wel­fare of a pop­u­la­tion that has en­dured the most pro­found eco­nomic col­lapse of any de­vel­oped na­tion since World War II could all be on the line.

Greeks will vote af­ter a week that has been per­haps the most dif­fi­cult for the coun­try since its debt cri­sis be­gan nearly six years ago. Banks stayed shut, with ATMs dis­pens­ing a mea­ger max­i­mum of 60 eu­ros per cus­tomer. Food banks and hos­pi­tals re­ported short­ages of ba­sic sup­plies. At of­fices and shops, deals were put on hold as Greeks anx­iously won­dered whether the week’s tur­moil was a mere pre­lude to some­thing far worse.

On the fi­nal day be­fore the vote, nei­ther side was per­mit­ted to cam­paign. But of­fi­cials in Greece and around Europe man­aged to work in some fi­nal in­sults as they sought to per­suade a pop­u­la­tion that polls show is split al­most ex­actly even be­tween yes and no.

Greece’s out­spo­ken fi­nance min­is­ter, Yanis Varoufakis, ac­cused the coun­try’s Euro­pean cred­i­tors of “ter­ror­ism,” say­ing that they hope to scare Greek vot­ers in to de­fy­ing their own gov­ern­ment and vot­ing yes.

“Why have they forced us to close the banks? To frighten peo­ple,” Varoufakis told the Span­ish news­pa­per El Mundo in an in­ter­view pub­lished Satur­day. “And when it’s about spread­ing terror, that is known as ter­ror­ism.”

Varoufakis told El Mundo that he did not think Greece’s cred­i­tors were se­ri­ous about kick­ing the coun­try out of the euro zone, as they have re­peat­edly threat­ened.

“It’s too much money, and I don’t be­lieve Europe could al­low it,” he said, es­ti­mat­ing the toll for the con­ti­nent at a tril­lion eu­ros.

Varoufakis also vowed to the Ger­man news­pa­per Frank­furter All­ge­meine Son­ntagszeitung that re­gard­less of which way Greece votes, the coun­try will sign a bailout deal with Europe on Mon­day.

Euro­pean of­fi­cials have scoffed at such claims, with Ger­man Fi­nance Min­is­ter Wolf­gang Schäu­ble re­it­er­at­ing on Satur­day that any new talks would be “very dif­fi­cult.”

Schäu­ble in­sisted that the col­lat­eral dam­age to other Euro­pean coun­tries from a Greek melt­down would be lim­ited. But in a po­ten­tial soft­en­ing of what had been a re­lent­lessly hard-line stance, he told the Ger­man tabloid Bild that Greece may only “tem­po­rar­ily” leave the euro zone even if the coun­try re­jects Europe’s bailout of­fer.

Greece and Europe have been on a col­li­sion course since Jan­uary, when Greek vot­ers elected the rad­i­cal left­ist Syriza gov­ern­ment on a plat­form of end­ing the strict aus­ter­ity im­posed here as a con­di­tion for mas­sive bailouts.

Greek Prime Min­is­ter Alexis Tsipras called the sur­prise ref­er­en­dum a lit­tle more than a week ago, hop­ing to gain lever­age in his bar­gain­ing over the terms of the coun­try’s cash-for-cuts deals.

But Syriza of­fi­cials say they think their pay­mas­ters are now try­ing to bring down the gov­ern­ment through a yes vote.

Be­fore ne­go­ti­a­tions broke off, they say, they were trapped by the in­co­her­ent de­mands of the credi tors, with the In­ter­na­tional Mon­e­tary Fund de­mand­ing tough aus­ter­ity but of­fer­ing to slash Greece’s debts and Euro­pean of­fi­cials eas­ing up on aus­ter­ity but promis­ing no debt for­give­ness.

“So we had the worst of both worlds,” said Ta­sos Koron­akis, the head of the 13-mem­ber sec­re­tar­iat that sets Syriza’s po­lit­i­cal poli­cies. “That’s the rea­son why we de­cided to turn to the peo­ple and in­volve them in ne­go­ti­a­tions.”

But Greece’s banks may not last much­longer with­out a deal. Greek banks have about $1.1 bil­lion of re­serves re­main­ing, enough to last through the end of Mon­day or Tues­day morn­ing, the head of the Na­tional Bank of Greece, Louka Kat­seli, told re­porters on Fri­day.

The Euro­pean Cen­tral Bank can choose to bol­ster the amount of emer­gency as­sis­tance it gives Greek lenders or it can pull the plug, a de­ci­sion that would im­me­di­ately cause the bank­ing sec­tor to col­lapse. It could also help trig­ger Greece’s exit from the euro zone.

That prospect ter­ri­fies the yes vot­ers.

“No will bring about a catas­tro­phe,” said John Seretis, 39, a phar­ma­ceu­ti­cals dis­trib­u­tor. “Yes will bring about many dif­fi­cult things. But at least we’ll be in the euro.”

But Kyr­i­akos Rous­sopou­los, a 41-year-old chef, said the gov­ern­ment should be will­ing to blaze its own path if the coun­try’s cred­i­tors won’t yield.

“We can make a new history,” he said. “We Greeks say that with an olive tree and a ship, we can build ev­ery­thing again from scratch. I may be poor for the next 10 years, but my kids will be bet­ter off.”

“Why have they forced us to close the banks? To frighten peo­ple.”

Yanis Varoufakis, fi­nance min­is­ter

ARIS MESSINIS/AGENCE FRANCE-PRESSE VIA GETTY IM­AGES

Greece’s fi­nance min­is­ter, Yanis Varoufakis, ac­cused the coun­try’s Euro­pean cred­i­tors of “ter­ror­ism.”

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