Greek voters overwhelmingly reject bailout terms

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People celebrate in Athens on July 5, 2015 after the first exit-polls of the Greek referendum (AFP Photo/Louisa Gouliamaki)
Reuters
Greeks voted overwhelmingly on Sunday to reject terms of a bailout, risking financial ruin in a show of defiance that could splinter Europe.
Results showed 61 percent voted "no," compared with 38 percent for "yes," with 93 percent of the vote counted. The referendum — Greece\’s first in more than four decades — 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 an all-or-nothing 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.
Officials from the Greek government, which had argued that a \’No\’ vote would strengthen its hand to secure a better deal from international creditors after months of wrangling, immediately said they would try to restart talks with European partners.
Greek Prime Minister Alexis Tsipras hailed a \’No\’ vote in Sunday\’s referendum on a bailout offer and said his government was ready to return immediately to negotiations with creditors in a bid to get shuttered banks open again.
Dismissing talk that the referendum was effectively a vote on whether Greece stays in the euro, Tsipras said the mandate that Greeks had given him was to reach a viable solution rather than clash with Europe.
"With the difficult circumstances prevailing today you made a very brave choice," Tsipras said in a televised address to Greeks. "I\’m fully aware the mandate you gave me is not one of a rupture with Europe but a mandate to strengthen our negotiating position to seek a viable solution."
Tsipras said he would ask the country\’s president to summon a meeting of political party leaders to brief them on the situation.
"The government now has a strong mandate, a strong negotiating card, to bring a deal which will open new ways."
But euro zone officials shot down any prospect of a quick resumption of talks. One official said there were no plans for an emergency meeting of euro zone finance ministers on Monday, adding the vote outcome meant the ministers "would not know what to discuss".
 
Many of Athens\’ partners have warned over the past week that a \’No\’ vote would mean cutting bridges with Europe and driving Greece\’s crippled financial system into outright bankruptcy, dramatically worsening the country\’s economic depression.
The result also delivers a hammer blow to the European Union\’s grand single currency project. Intended to be permanent and unbreakable when it was created 15 years ago, the euro zone could now be on the point of losing its first member with the risk of further unraveling to come.
"I believe such a result can be used as a strong negotiating tool so that Europeans can understand that we are not a colony," said Nefeli Dimou, a 23-year-old student in Athens.
Greek banks, which have been closed all week and rationing withdrawals from cash machines, are expected to run out of money within days unless the European Central Bank provides an emergency lifeline. Finance Minister Yanis Varoufakis is due to meet top Greek bankers later on Sunday and State Minister Nikos Pappas, one of Prime Minister Alexis Tsipras\’s closest aides, said it was "absolutely necessary" to restore liquidity to the banking system now that the vote is over.
However the European Central Bank, which holds a conference call on Monday morning, may be reluctant to increase emergency lending to Greek banks after voters rejected the spending cuts and economic reforms which creditors consider essential to make Greek public finances viable, central bankers said.
 
First indications were that any joint European political response may take a couple of days. German Chancellor Angela Merkel and French President Francois Hollande will meet in Paris on Monday afternoon. The European Commission, the EU executive, meets in Strasbourg on Tuesday and will report to the European Parliament on the situation.
"EU leaders must get together immediately, even on Monday. The situation is too serious to leave to finance ministers," said Axel Schaefer, a deputy head of the Social Democrat (SPD) group in the German parliament.
"You have to have confidence in the ability of the ECB to act. We must use all the possibilities in the EU budget to help Greece, which is still a member of the euro and the EU."
 
A \’No\’ vote puts Greece and the euro zone in uncharted waters. Unable to borrow money on capital markets, Greece has one of the world\’s highest levels of public debt. The International Monetary Fund warned last week that it would need massive debt relief and 50 billion euros in fresh funds.
 
Greek officials see the IMF report as a vital support for their argument that the bailout terms as they stood would merely have driven Greece further into depression.
Tsipras called the referendum eight days ago after rejecting the tough terms offered by international creditors as the price for releasing billions of euros in bailout funds.
He denounced the bailout terms as an "ultimatum" and his argument that a \’No\’ vote would allow the government to get a better deal appears to have convinced many Greeks, particularly among younger voters who have been ravaged by unemployment levels of nearly 50 percent.
"I have been jobless for nearly four years and was telling myself to be patient," said 43-year-old Eleni Deligainni, who said she voted \’No\’. "But we\’ve had enough deprivation and unemployment."
Opinion polls over the months have shown a large majority of Greeks want to remain in the euro.
But, exhausted and angry after five years of cuts, falling living standards and rising taxes imposed under successive bailout programs, many appear to have shrugged off the warnings of disaster, trusting that a deal can still be reached.
Polling booths closed at 16:00 GMT on Sunday, with ten million Greeks eligible to vote.
SOURCE: REUTERS

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