Despite vote win, Tsipras faces urgent task

GREECE: With banks on the edge of collapse, PM must quickly negotiate a deal with European creditors

ATHENS — Despite triumphing in a popular vote against austerity, Greece on Monday faced the urgent need to heal its ties with European creditors and reach a financial rescue deal that might prevent it from falling out of the euro — possibly within days.

Prime Minister Alexis Tsipras won big in Sunday’s referendum, in which 60 per cent of Greeks rejected the economic measures creditors had proposed in exchange for loans the country needs to remain afloat.

But his bolstered mandate to push for better concessions from creditors hit the hard reality of the country’s deteriorating finances, with the banks facing the risk of collapse within days unless a deal is reached.

In a sign that he hopes to reach a deal as soon as possible, Tsipras appointed a new mild-mannered finance minister to lead talks with bailout creditors and replace Yanis Varoufakis, the hard-talking professor who clashed regularly with his European counterparts.

Euclid Tsakalotos, a 55-year-old economist, appears more willing to reach a deal with creditors and will be tested as soon as Tuesday, when he will meet the other 18 eurozone finance ministers in Brussels.

Greece’s financial situation is getting more difficult by the day. It had to close the banks last week to prevent their collapse in the face of a run, and imposed limits on cash withdrawals and transfers.

Greek banks remained closed Monday, with only a few branches opening for pensioners to receive emergency assistance. Louka Katseli, head of the Greek Bank Association, said she expected banks to remain closed for at least two more days.

The European Central Bank has frozen the amount of credit it allows Greek banks to draw on, even though their cash requirements are growing.

German Vice Chancellor Sigmar Gabriel said Europe should be preparing to help Greeks with humanitarian assistance.

“The situation that is now being created by the referendum makes me sad, because life for the Greek population is going to get harder in the coming days and weeks,” he said.