Greeks defy EU with overwhelming ‘No’; Finance minister resigns

ATHENS (Reuters) – Greeks overwhelmingly rejected conditions of a rescue package from creditors on Sunday, throwing the future of the country’s euro zone membership into further doubt and deepening a standoff with lenders.

Stunned European leaders called a summit for Tuesday to discuss their next move after the surprisingly strong victory by the ‘No’ camp defied opinion polls that had predicted a tight contest.

The euro and stock prices fell sharply at the market open in Asia on

Monday but then recovered some of their losses, with dealers emphasizing that markets were orderly and showing no signs of financial strain.

In Athens, thousands of jubilant Greeks waving flags and bursting fire crackers poured into the city’s central square as official figures showed 61 percent of Greeks had rejected a deal that would have imposed more austerity measures on an already ravaged economy.

“You made a very brave choice,” Prime Minister Alexis Tsipras said in a televised address. “The mandate you gave me is not the mandate of a rupture with Europe, but a mandate to strengthen our negotiating position to seek a viable solution.”

Unchartered waters The vote leaves Greece in uncharted waters: risking a banking collapse that could force it out of the euro.

Without more emergency funding from the European Central Bank, Greece’s banks could run out of cash within days after a week of rising desperation as banks shut and cash machines ran dry. That might force the government to issue another currency to pay pensions and wages.

For millions of Greeks the outcome was an angry message to creditors that Greece can no longer accept repeated rounds of austerity that, in five years, had left one in four without a job and shrank the economy by a quarter.

Tsipras has denounced the price paid for aid as “blackmail”, a national “humiliation”.

“The message from the ‘No’ is that we’re not scared after all the pressure that we faced from both Europe and within,” said Stathis Efthimiadis, a 47-year-old teacher.

“We want to live fairly and freely within Europe.”

Finance minister resigns While jubilant supporters celebrated their victory, Greek Finance Minister Yanis Varoufakis, whose forceful denunciations of creditors alienated many of his euro zone colleagues, resigned on Monday, saying Prime Minister Alexis Tsipras believed it would help smooth the path to a new aid deal.

With relations already frosty, Varoufakis infuriated Greece’s European partners last week when he accused creditors of using “terrorism” against the Greek people to intimidate them into accepting more austerity.

In a statement, Varoufakis said he had been “made aware” that some members of the euro zone did not want him to attend meetings of finance ministers, and his absence was “an idea the prime minister judged to be potentially helpful to him in reaching an agreement”.

“For this reason I am leaving the ministry of finance today.”

“I consider it my duty to help Alexis Tsipras exploit, as he sees fit, the capital that the Greek people granted us through yesterday’s referendum,” Varoufakis said. “And I shall wear the creditors’ loathing with pride.”