2 Jul 2015

Greece referendum: Syriza urges voters to reject bailout

Politicians with Greece’s ruling Syriza party, including Prime Minister Tsipras, say the country should vote no in Sunday’s referendum, as the Bank of England warns of a “very dangerous” situation.

Greek Prime Minister Alexis Tsipras has asked his compatriots to vote no, arguing that it would guarantee a better bailout deal from creditors.

“No means powerful pressure for a financial agreement that will give a solution to the debt,” he said in a TV address earlier this week.

And today Greece’s Finance Minister Yanis Varoufakis said he would resign if the country votes to accept bailout terms offered by the EU, the International Monetary Fund (IMF) and the European Central Bank (ECB).

No means powerful pressure for a financial agreement that will give a solution to the debt. Alexis Tsipras, Greek prime minister

Speaking on Bloomberg TV, Mr Varoufakis confirmed that he would not be finance minister on Monday night in the event of a yes vote.

Greeks will be asked at the weekend if they want to accept conditions for payment of the final tranche of a bailout deal agreed with the “troika” in 2012.

That deal asks Greeks to agree to such proposals as a later retirement age and a range of increased VAT rates.

Referendum yes supporters protest in Athens (Reuters)

Mixed messages

EU finance ministers and bankers have expressed conflicting views on the prospects for a deal.

Playing on suggestions that Greece has sent out mixed messages about its willingness to negotiate an agreement, German Finance Minister Wolfgang Schaeuble told journalists in Berlin: “Last night we had a phone conference which ended without any results because there was confusion about what they meant or wanted.”

He continued: “There are also reports that the referendum would be cancelled. All of this is no basis to have serious negotiations, and first of all Greece must be clear about what it wants.”

Read more: special report on the eurozone financial crisis

Pensioners wait outside a National Bank granch in Athens (Reuters)

‘Prepare for the worst’

Michael Sapin, France’s finance minister, stressed that Europe remains committed to avoiding “catastrophe” for Greece and to keeping it in the Eurozone.

Meanwhile, Christine Lagarde, managing director of the IMF, one of the Greek debt institutions, said her organisation was well-equipped to weather the financial storm caused by Greece.

That view was endorsed by Bank of England Deputy Governor Sir Jon Cunliffe, who told BBC Radio: “Financial markets are not showing there is contagion or spreading of those risks to the periphery.”

However, he described Greece’s stand-off with its creditors as “very dangerous” and said central bankers should be “prepared for the worst” in the coming days.

Long queues

Athens and the troika now appear to have halted talks on resolving the financial crisis until the Sunday vote.

Banks have been closed all week to prevent a crash from mass money withdrawals, while a few have been reopened to help pensioners without bank cards.

Long queues were already forming early on Thursday outside a branch of the National Bank of Greece in Kallithea, central Athens.