Greece proceeds with vote plan as creditors rebuff overture

[webfact]

Greece proceeds with vote plan as creditors rebuff overture
By ELENA BECATOROS and MENELAOS HADJICOSTIS

ATHENS, Greece (AP) — The Greek government vowed Wednesday to go ahead with plans to have the people decide whether they want more austerity measures in exchange for a rescue deal. Greece offered more concessions to its creditors, but was rebuffed — Eurozone finance ministers refused to negotiate any more aid until the referendum clears up what the country wants.

The moves came on a fast-paced day of zigs-and-zags that saw the Greek prime minister back off his earlier refusal to consider creditors' belt-tightening demands, yet hold firm on putting the measures to a popular vote.

The strategy was met with a cool response.

Following a late-night teleconference, the 19 eurozone finance ministers announced they were putting any further talks on hold.

"Given the political situation, the rejection of the previous proposals, the referendum which will take place on Sunday, and the recommendation by the Greek government to vote 'No,' we see no grounds for further talks at this point," said Dutch Foreign Minister Jeroen Dijsselbloem, who heads the eurozone finance ministers' body known as the eurogroup.

"There will be no talks in the coming days, either at eurogroup level or between the Greek authorities and the institutions on proposals or financial arrangements," Dijsselbloem said,

Earlier Wednesday, Prime Minister Alexis Tsipras was defiant, saying the referendum would go ahead as planned Sunday and again urging citizens to vote "No." In a televised address to the nation, he said a "No" result would not mean that Greece would have to leave the euro, as many European officials have argued.

Rather, Tsipras insisted, it would give the government a stronger negotiating position with creditors.

"There are those who insist on linking the result of the referendum with the country's future in the euro," Tsipras said. "They even say I have a so-called secret plan to take the country out of the EU if the vote is 'No.' They are lying with the full knowledge of that fact."

Greece is in financial limbo after its bailout program expired at midnight Tuesday, cutting it off from vital financing and pushing it one step closer to leaving the euro. It also became the first developed country to fail to repay a debt to the International Monetary Fund on time. The last country to miss an IMF payment was Zimbabwe in 2001.

Still, there was some good news: Amid more chaotic scenes outside closed banks in Athens and elsewhere, the terms of its emergency $100 billion cash support were left unchanged.

Finance Minister Yanis Varoufakis thanked the European Central Bank and its president, Mario Draghi for the decision. "This allows us to breathe. It's a very positive move and a move of goodwill on the part of the European Central Bank," Varoufakis told state television.

Draghi, he said, had faced down "hawks" among eurozone members who had demanded that Athens increase the collateral needed to receive continued assistance.

Sunday's hastily called referendum is based on creditor reform proposals made last week and roundly rejected by the Greek government.

But in a letter sent late Tuesday, Tsiparis reversed course and said his government was prepared to accept the earlier proposals, subject to certain amendments on central points of contention, including pensions and tax increases. He linked acceptance of the terms to a new bailout package.

Hopes that Tsipras was softening his position — after refusing for five months to accept the proposed spending cuts — boosted markets across Europe, the United States and Asia.

But some of Greece's main creditors — including Germany, the largest single contributor to Greece's bailout — contended it wasn't good enough and that a deal was impossible in any case before the referendum.

"We will wait for the referendum," Chancellor Angela Merkel told the German Parliament. "There can be no negotiations on a new aid program before the referendum."

French President Francois Hollande urged an agreement before then, saying it was the responsibility of other countries that use the shared currency to keep Greece in the eurozone.

"We have to be clear. An accord is for right now, it will not be put off," said Hollande, a Socialist who has been one of the few remaining EU allies of Greece's leftist government.

"It is our duty to keep Greece in the eurozone," he said. "That depends on Greece ... but it also depends on us."

The head of a top European intergovernmental institution, meanwhile, questioned whether Sunday's referendum would meet international standards that call for at least two weeks' notice to allow for discussion, crafting a clear question to be put to voters and for inviting international observers to monitor the vote.

Sunday's vote "has been called on such a short notice that this in itself is a major problem," Council of Europe chief Thorbjorn Jagland told The Associated Press. He said the question being put to the people was "not very clear" and his agency, which monitors votes, had not been invited to do so.

With its economy teetering near the abyss, Greece suffered its fourth downgrade this week when Moody's rating agency slashed its rating further into junk status, just above default. The agency said Greece was likely to default on its remaining privately held debt due to its impasse with lenders.

The country has put limits on cash withdrawals to keep banks from collapsing after Greeks rushed to pull money out of ATMs following the referendum call at the start of the weekend.

In Athens, crowds of anxious elderly Greeks thronged banks before dawn Wednesday, struggling to withdraw the maximum 120 euros ($134) for the week after the government reopened some banks to help pensioners who don't have bank cards. Greeks are now limited to daily ATM withdrawals of 60 euros ($67) and cannot send money abroad without special permission.

With many elderly Greeks unable to access any money without bank cards, the government said about 1,000 bank branches would open for three days starting Wednesday to give them access to some cash.

But a seeming last-minute decision to serve customers on an alphabetical basis led to chaotic scenes of confusion and anger, with many pensioners waiting hours to eventually be told they would have to return Thursday or Friday.

Others were told their pensions had not yet been deposited and they would therefore have to return later in the week.

"It's very bad," said retired pharmacy worker Popi Stavrakaki, 68. "I'm afraid it will be worse soon. I have no idea why this is happening."
____

Derek Gatopoulos in Athens, Geir Moulson in Berlin, Angela Charlton in Paris and Gregory Katz in Athens contributed to this report.


-- (c) Associated Press 2015-07-02

[ezzra]

So the Greek PM folded like a cheap lawn chair.... gone are the bravado acts and the pestering,

realizing that he's facing a calamity in the making, he got his senses about him back, let's hope that

Greek and the Greek people can go back to living normal life and reclaim their position in the

world like they once held....

[F430murci]

Pay up sucker . . . or go to Russia. Lol, let us know how that is working for you in 3 years. Just ask Ukraine about Russian financial help . . .

[cumgranosalum]

So the Greek PM folded like a cheap lawn chair.... gone are the bravado acts and the pestering,

realizing that he's facing a calamity in the making, he got his senses about him back, let's hope that

Greek and the Greek people can go back to living normal life and reclaim their position in the

world like they once held....

Really - what are your news sources? He's just put in a last minute bid he knows can't be taken to to cover his arse.

[cumgranosalum]

At the end of the day most Greeks want to stay in the EU and use the Euro.....but they feel the EU is imposing too harsh a financial regime on them.......the EU doesn't want Greece out - not so much because of the size of their economy (it's tiny) but because of how it will look if they leave and what might happen to other shaky members.....Italy being the elephant in the room.

Greece will experience a few days without banks before the referendum.......(.which has constitutional questions over i's appropriateness) and will then give the govt a mandate or NOT....

in the meantime the EU boffins will have time to cool off...i think any real answer will happen in a week or so and may involve kicking the can down the road again...

..........otherwise Greece could become a cheap holiday destination to rival Thailand.....so long as there isn't a coup....Greece is no stranger to military juntas

Edited July 2, 2015 by cumgranosalum

[BuaBS]

We don't know what is happening behind the scenes. Blackmail is no stranger in these situations.

I think the referendum is going to blow up in his face with a yes vote . The majority of Greeks are too ignorant to vote the right way , they just want to get to their blocked money.

With a yes vote Tsipras will lose all his bargoning power with the EU and lose face .

[IamNoone88]

You reap what you sow. The Greeks brought this upon themselves and through decades of poor governance. They owe Euro 323 BILLION and the only reason they want to stay is to get another 29 BILLION from the rest of hard working and tax paying Europe. And they have acted with such arrogance. Europe should have a vote if they want Greece in the Eurozone and are prepared to continue to support them and pour good money after bad. The sooner the Greeks are out the better.

[cumgranosalum]

We don't know what is happening behind the scenes. Blackmail is no stranger in these situations.

I think the referendum is going to blow up in his face with a yes vote . The majority of Greeks are too ignorant to vote the right way , they just want to get to their blocked money.

With a yes vote Tsipras will lose all his bargoning power with the EU and lose face .

"The majority of Greeks are too ignorant to vote the right way"

this says more about the poster than it does about the Greeks.

[cumgranosalum]

You reap what you sow. The Greeks brought this upon themselves and through decades of poor governance. They owe Euro 323 BILLION and the only reason they want to stay is to get another 29 BILLION from the rest of hard working and tax paying Europe. And they have acted with such arrogance. Europe should have a vote if they want Greece in the Eurozone and are prepared to continue to support them and pour good money after bad. The sooner the Greeks are out the better.

you need to balance the figures the Greeks get against the amount that will be wiped off the Euro and European finances if they don't get it.

The mess that Greece is in is not just down to Greece, it is down to the way that europe has maned the "weaker" financed nations within the Eu in order basically to keep up appearances. Several countries have joined the Euro (not the EU) over the years who basically should not have.

Greece has a population of just over 10 million against the total EU population of 460 million or thereabouts...the financial effect they are having is minimal in real terms but huge in terms of knock-on and perception of the markets...it isn't the money so much as what they are doing in contravention of the treaties.

[godden]

Wake me when some thing happens zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz

[stevenl]

We don't know what is happening behind the scenes. Blackmail is no stranger in these situations.

I think the referendum is going to blow up in his face with a yes vote . The majority of Greeks are too ignorant to vote the right way , they just want to get to their blocked money.

With a yes vote Tsipras will lose all his bargoning power with the EU and lose face .

He does not have any bargaining power anyway. It is either 'yes', so the Euro proposal is accepted, or 'no' and they have to find their own way. And till the referendum there will be no negotiations.

[joebrown]

You reap what you sow. The Greeks brought this upon themselves and through decades of poor governance. They owe Euro 323 BILLION and the only reason they want to stay is to get another 29 BILLION from the rest of hard working and tax paying Europe. And they have acted with such arrogance. Europe should have a vote if they want Greece in the Eurozone and are prepared to continue to support them and pour good money after bad. The sooner the Greeks are out the better.

you need to balance the figures the Greeks get against the amount that will be wiped off the Euro and European finances if they don't get it.

The mess that Greece is in is not just down to Greece, it is down to the way that europe has maned the "weaker" financed nations within the Eu in order basically to keep up appearances. Several countries have joined the Euro (not the EU) over the years who basically should not have.

Greece has a population of just over 10 million against the total EU population of 460 million or thereabouts...the financial effect they are having is minimal in real terms but huge in terms of knock-on and perception of the markets...it isn't the money so much as what they are doing in contravention of the treaties.

IMHO if the creditor banks pump any more EU taxpayers' money into Greece they might as well call it a gift rather than a loan. Greece will be a never ending saga and will always be 'cap in hand' knocking on the doors of the banks. It's a pity the 'always risky' UK Northern Rock was bailed out by the UK Gov't, as this became a 'green light' to the rest of the UK's lenders that they could lend irresponsibly, but with impunity because they were too big to be allowed to fall. What followed was a 'domino effect' and a major financial crisis. I'm only a little bit sorry for the Greek populace, because they've had the cake and now they want to eat more , paid for and baked by someone else, of course.

Edited July 2, 2015 by joebrown

[Ulic]

The Greeks lied to get in to the EU, they continued to fudge the books so things did not

look as dire, they lied about farm production so they could get increased farm subsidies.

They allowed early retirement as young as 50 in segments of the workforce, they have

double the number of civil servants per 1000 population as the north of Europe, they

refuse to pay tax, it is the national pastime to avoid paying any taxes. The list is endless.

Between the 320 billion they currently owe, the 100+ billion of debt reduction in the

first go round, and the 89 billion the Greek banks have borrowed from the ECB for

emergency liquidity they are more than 500 billion ahead. Now the chutzpah (unmitigated

gall) to ask for another 29 billion and to have a significant reduction of the debt.

And to say the problem is austerity not the decades of Greek government financial

irresponsibility. And the biggest argument to keep giving money and forgive the debt is

it will cost you more in lost value of the Euro and stock markets than if you don't. I say the

exact opposite. If you give into the lying and blackmailing of Greece, who next, Portugal,

Ireland, Spain. The suffering Spain is enduring is purely self inflicted. Living high on the

hog since they got into the EU. The EU will suffer from its own stupidity of believing the

Greeks, trust but verify the numbers comes to mind. Either way the EU will have walk away

from its money as it will never be repaid, the question is do they want to give a further

30-50 billion a year in perpetuity to Greece to fund Greece's lavish pension plans and

bloated civil service. I say quit throwing good money after bad, take your medicine walking

away from what is owed to you and let the Greek people and government sort themselves

out. Just my view, not saying it is PC or the only way, just what makes sense to me.

[FangFerang]

The whole battle being waged is about...pensions, and not everyone's pensions...but government pensions -- which are insanely high and a serious drag on the Greek economy. Government officials always vote themselves raises, usually while simultaneously denying minimum wage increases to their own people...including the US, GB, and many Western countries.

[bassman]

You reap what you sow. The Greeks brought this upon themselves and through decades of poor governance. They owe Euro 323 BILLION and the only reason they want to stay is to get another 29 BILLION from the rest of hard working and tax paying Europe. And they have acted with such arrogance. Europe should have a vote if they want Greece in the Eurozone and are prepared to continue to support them and pour good money after bad. The sooner the Greeks are out the better.

you need to balance the figures the Greeks get against the amount that will be wiped off the Euro and European finances if they don't get it.

The mess that Greece is in is not just down to Greece, it is down to the way that europe has maned the "weaker" financed nations within the Eu in order basically to keep up appearances. Several countries have joined the Euro (not the EU) over the years who basically should not have.

Greece has a population of just over 10 million against the total EU population of 460 million or thereabouts...the financial effect they are having is minimal in real terms but huge in terms of knock-on and perception of the markets...it isn't the money so much as what they are doing in contravention of the treaties.

Really? Greece with the commie thugs running the current government are in dire straights. The elected gov. has gone all out to piss the world off with their antics. Did you notice the Euro over the last few days, has been steady despite Greece. Lot of financial pundits believe that a Grexit would be good for the Euro and time for the Euro zone to hold its members to responsibility. So your theory of Greece blackmailing the Europeans is way over blown. Most countries in the zone have high standards.

[wabothai]

We don't know what is happening behind the scenes. Blackmail is no stranger in these situations.

I think the referendum is going to blow up in his face with a yes vote . The majority of Greeks are too ignorant to vote the right way , they just want to get to their blocked money.

With a yes vote Tsipras will lose all his bargoning power with the EU and lose face .

"The majority of Greeks are too ignorant to vote the right way"

this says more about the poster than it does about the Greeks.

This is quite a complicated matter and I am sure that lots of Creeks wouldn't know how to vote. A better way of putting it.

[webfact]

Greece in limbo: Shuttered banks keep lifeline
By ELENA BECATOROS and DEREK GATOPOULOS

ATHENS, Greece (AP) — Greece braced for more chaos on the streets outside its mostly shuttered banks Thursday, as Athens and its creditors halted talks on resolving the country's deepening financial crisis until a referendum this weekend.

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

But they are still in business. The European Central Bank left the terms of its emergency $100 billion cash support to Greece unchanged, a day after Athens slipped into arrears with the International Monetary Fund and its bailout program expired.

The move kept chances alive for a settlement between Greece and creditors. And Finance Minister Yanis Varoufakis publicly thanked the ECB and its president, Mario Draghi, for the decision.

"This allows us to breathe. It's a very positive move and a move of good will on the part of the European Central Bank. I welcome it," Varoufakis told state television.

Draghi, he said, had faced down "hawks" among eurozone members who had demanded that Athens increase collateral needed to receive continued assistance.

Asian stock markets advanced Thursday after gains on Wall Street as strong U.S. payroll data overshadowed worries about the Greek crisis.

Greece is seeking a third bailout from the eurozone rescue fund after the previous deal expired this week without agreement on the terms of final pay outs.

The impasse left billions bailout money frozen or canceled and saw Greece forced to close banks and its stock market for at least a week, while the country's left-wing government called a referendum urging voters to denounce the previous deal offered by creditors.

Eurozone finance ministers decided to put the talks with Greece on hold till the vote takes place.

"Given the political situation, the rejection of the previous proposals, the referendum which will take place on Sunday, and the recommendation by the Greek government to vote 'No,' we see no grounds for further talks at this point," Dutch Foreign Minister and eurogroup chairman Jeroen Dijsselbloem said after a late-night teleconference.

"There will be no talks in the coming days."

In Athens, crowds of anxious elderly Greeks thronged banks Wednesday beginning before dawn, struggling to withdraw their maximum of 120 euros ($134) for the week after the government reopened some banks to help pensioners who don't have bank cards.

"It's very bad," said retired pharmacy worker Popi Stavrakaki, 68. "I'm afraid it will be worse soon. I have no idea why this is happening."

Business associations and the country's largest labor union urged the government to cancel the vote.

And the Council of Europe — an independent body that monitors elections and human rights — told The Associated Press the referendum would fall short of international standards.

In a sign of serious financial deterioration, Greece suffered another sovereign downgrade, the fourth this week, as Moody's slashed the country's rating from Caa2 to Caa3, or just above default.

Prime Minister Alexis Tsipras resisted the pressure, however, insisting a "No" vote would give the government a stronger negotiating position.

"There are those who insist on linking the result of the referendum with the country's future in the euro," Tsipras said. "They even say I apparently have a secret plan to take the country out of the EU if the vote is 'No.' They are lying with the full knowledge of that fact."

Greece is in a financial limbo now that its bailout program has expired, cutting it off from vital financing and pushing it one step closer to leaving the euro. It also has become the first developed country to fail to repay a debt to the International Monetary Fund on time. The last country to miss an IMF payment was Zimbabwe in 2001.

As long as it is in arrears on the IMF payment, Greece cannot get any more money from the organization.

The referendum has thrown additional confusion into the already fraught negotiations.

German Chancellor Angela Merkel said a deal remained impossible before the referendum, while French President Francois Hollande said creditors should seek an accord before then.

"We have to be clear. An accord is for right now, it will not be put off," Hollande said.
____

Menelaos Hadjicostis and Gregory Katz in Athens, Geir Moulson in Berlin, Angela Charlton and Lorne Cook in Brussels contributed to this report.

-- (c) Associated Press 2015-07-02

[Mudcrab]

So Greece is in dire straits because they can't borrow any more money. How often has the debt ceiling been raised in the US and other countries because they are basically bankrupt?

[Scott]

One of my kids once threatened to hold his breath until he died if I wouldn't give him some money. I didn't and he didn't.

I do hope this gets resolved.

[abrahamzvi]

So Greece is in dire straits because they can't borrow any more money. How often has the debt ceiling been raised in the US and other countries because they are basically bankrupt?

The USA did raise the debt ceiling a number of times, but the difference is that the USA is credit worthy and thus able to finance its debts on the international financial markets. Greece can't do so, as its credit score is practically NIL

[freebyrd]

Costas has been unusually silent through this. I haven't seen comments about Greece or any other subject for quite a while?

[Shiver]

If I were Greek I'd be voting to get out of the EU. It's less than 2% of the EU, so it's best hand is the damage it can do to EU image rather than financial damage.

I'm sure the above won't be popular with many, but then politics isn't usually associated with taking the high moral ground.

How to pay back the debt is a whole other more complex conversation, and would surely need some shrinking of government. Good luck in finding any volunteers inside government for that one.

[EnglishJohn]

Just a big game of chicken.

My prediction is a very-last minute compromise to tide it over for yet another 6 months.

The rest of the EU taxpayers will have to cough up whatever it costs to keep them in the club. The ONLY thing which is important is that the gravy train keeps going and the politicians can claim to represent X million people on the world stage.

[wabothai]

Costas has been unusually silent through this. I haven't seen comments about Greece or any other subject for quite a while?

He may have abandoned all of us.

[cumgranosalum]

We don't know what is happening behind the scenes. Blackmail is no stranger in these situations.

I think the referendum is going to blow up in his face with a yes vote . The majority of Greeks are too ignorant to vote the right way , they just want to get to their blocked money.

With a yes vote Tsipras will lose all his bargoning power with the EU and lose face .

"The majority of Greeks are too ignorant to vote the right way"

this says more about the poster than it does about the Greeks.

This is quite a complicated matter and I am sure that lots of Creeks wouldn't know how to vote. A better way of putting it.

Merely re-enforces the feeling I get about some posters.

[cumgranosalum]

Costas has been unusually silent through this. I haven't seen comments about Greece or any other subject for quite a while?

I presume he's Greek? So he's probably run out of cash?

[cumgranosalum]

Is it just me or do others find it difficult to respect the opinion of someone who uses expressions like "commie thugs"?

[Scott]

An off-topic post has been removed.

[MaeJoMTB]

Is it just me or do others find it difficult to respect the opinion of someone who uses expressions like "commie thugs"?

It would depend who they were talking about .......

If it were Joe Stalin and the KGB, probably justified.

If it were about the protesters in London, probably not.

[Lissos]

..........otherwise Greece could become a cheap holiday destination to rival Thailand.....so long as there isn't a coup....Greece is no stranger to military juntas

I don't know, I can't see Greeks being able to adjust easily to a collosal fall in income after the good years of the Euro even if some are waiting in the wings for an imminent cheap holiday. I was on Crete last year and met some expats who had made the observation that harbour front tavernas were using the same mindset as people here have noted about Thailand, that rather than 'reward' loyal visitors or entice more in with a reduction in prices, they were doing the complete opposite, rising prices and punishing those who came by making them make up the income reduction. Eventually though, some did snap out of it though apparently.

I reckon more places will just shut up shop and take their chances starting work new in some other Euro country than take the punch on the chin of renting rooms out for the equivalent of 8 Euros rather than the previous 30-40 per night. I can't imagine what it would be like to 'revert' to such a fall in income, and even more so for those Greeks born in the Euro years. It would be a big fall, and for that reason an 'Exodus' (Greek word itself) may be witnessed.