Greek voters reject more austerity
Nation’s future is uncertain after referendum result
ATHENS, Greece — Greece lurched into uncharted territory and an uncertain future in Europe’s common currency Sunday after voters overwhelmingly rejected demands by international creditors for more austerity measures in exchange for a bailout of its bankrupt economy.
Results showed 61 percent voted “no,” compared with 38 percent for “yes,” with 97 percent of the vote counted. The referendum came amid severe restrictions on financial transactions in the country, imposed last week to stem a bank run that accelerated after the vote was called.
Thousands of jubilant government supporters celebrated in Syntagma Square in front of Parliament, waving Greek flags and chanting “No, no, no!”
It was a decisive victory for Prime Minister Alexis Tsipras, who had gambled the future of his 5-month-old leftist government — and his country — in a game of brinkmanship with Greece’s creditors from other European countries that use the euro currency, the International Monetary Fund and the European Central Bank.
“Today we celebrate the victory of democracy,” Tsipras said in a televised address, describing Sunday as “a bright day in the history of Europe.”
Tsipras called the referendum last weekend, saying a “no” vote would strengthen his hand to negotiate a better deal for his country. His government has said it believes it would be possible to conclude a deal with creditors within 48 hours.
But European officials and most of Greece’s opposition parties painted the referendum as one of whether the country kept using the euro currency — even though that was not the convoluted question asked on the ballot. Opinion polls Friday showed that 74 percent or more want their country to remain in the euro.
How European officials react to the referendum result will be critical, and a eurozone summit was called for Tuesday evening to discuss the situation.
German Chancellor Angela Merkel and French President Francois Hollande spoke to each other Sunday night and agreed “that the vote of the Greek people must be respected,” Merkel’s office said.
Sigmar Gabriel, Germany’s vice chancellor and economic minister, told a German newspaper that Tsipras has “torn down the last bridges across which Europe and Greece could move toward a compromise.”
Belgian Finance Minister Johan Van Overtveldt said a “no” result “complicates matters,” but he insisted the door remained open to resume talks within hours.
The international bailout — under which Greece received nearly 240 billion euros in rescue loans — expired last week, on the same day Greece defaulted on an IMF repayment, becoming the first developed nation to do so.
Of critical importance will be whether the European Central Bank decides to maintain its current lifeline to Greece in the form of emergency liquidity assistance, or ELA. The assistance, currently at around 90 billion euros, has been maintained but not increased in past days, leaving the country’s financial system in a stranglehold.
Sunday’s vote was held after a week of capital controls imposed to halt a bank run, with Greeks restricted to a daily cash withdrawal maximum of 60 euros, or about $67.
The ECB operates on rules according to which it can only continue ELA funding if Greece is in a bailout. Without an increase, it is unclear how much longer people will be allowed to withdraw 60 euros per day. Some analysts say Greece is so starved of cash that it could be forced to issue its own currency.
No country has ever left the eurozone, established in 1999.