Greece enters uncharted territory after referendum 'no' vote

[webfact]

Greece enters uncharted territory after referendum 'no' vote
By ELENA BECATOROS and DEMETRIS NELLAS

ATHENS, Greece (AP) — 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 — 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 coalition 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.

"Today we celebrate the victory of democracy," Tsipras said in a televised address to the nation, describing Sunday as "a bright day in the history of Europe."

"We proved even in the most difficult circumstances that democracy won't be blackmailed," he said.

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 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.

"Given the unfavorable conditions last week, you have made a very brave choice," Tsipras told Greeks in his address. "But I am aware that the mandate you gave me is not a mandate for rupture." He said he would seek to negotiate a viable solution with the country's creditors.

How European officials react to the referendum result will be critical for the country, 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.

The referendum result was "very regrettable for the future of Greece," said Jeroen Dijsselbloem, head of the eurozone finance ministers' meeting known as the Eurogroup, which also will meet Tuesday.

Dijsselbloem, who is finance minister for the Netherlands, had been a steadfast opponent of Greece as it sought better conditions during five months of bailout talks.

"For recovery of the Greek economy, difficult measures and reforms are inevitable," he said. "We will now wait for the initiatives of the Greek authorities."

Sigmar Gabriel, Germany's vice chancellor and economic minister, told a German newspaper the Greek government was leading its people "onto a path of bitter austerity and hopelessness."

Tsipras has "torn down the last bridges, across which Europe and Greece could move toward a compromise," Gabriel told the daily Tagesspiegel. "By saying 'no' to the eurozone's rules, as is reflected in the majority 'no' vote, it's difficult to imagine negotiations over an aid package for billions."

Belgian Finance Minister Johan Van Overtveldt was somewhat softer in his reaction, saying a "no" result "complicates matters," but that the door was open to resume talks immediately.

"What we certainly don't want to do is to take decisions that will threaten the monetary union," he told Belgium's VRT. "Within that framework we can start talks again with the Greek government, literally, within hours."

Time has run out for Greece, which is dealing with an economy in a protracted recession, with high unemployment and banks dangerously low on capital.

The international bailout — under which it 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 ($67). Long lines have formed at ATMs, while pensioners without bank cards have thronged the few bank branches opened to allow them access to a maximum 120 euros for the week. Queues at ATMs swelled again as the initial results of the referendum came in.

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 start issuing its own currency. No country has ever left the 19-member eurozone, established in 1999.

The margin of victory was far wider than expected, and is likely to strengthen the young prime minister's defiance toward Europe. Tsipras was voted into office in January on a promise to repeal bailout austerity.

"This victory for the 'no' camp will unfortunately embolden the government, but is likely to do little to convince the creditors that Tsipras is a trustworthy negotiating partner who has any ability to implement a deal," said Megan Greene, chief economist of Manulife Asset Management.

"Any deal for Greece will involve a much larger fiscal adjustment than the one on which Greeks voted today. I don't think that Germany in particular will be willing to make any concessions for Tsipras."

There was confusion Sunday night over the fate of bank safety deposit boxes, with Deputy Finance Minister Nadia Valavani saying people would be allowed to remove items but not cash from them, and Alternate Finance Minister Dimitris Mardas later said the issue would have to be legislated.

Yiannis Gkovesis, 26, waved a large Greek flag in the capital's main square with supporters of the "no" vote.

"We don't want austerity measures anymore. This has been happening for the last five years and it has driven so many into poverty, we simply can't take any more austerity," Gkovesis said.

Constantinos Papanikolas, 73, who also clutched a Greek flag, said the result meant "a fresh start, a new page for Greece and for Europe, which has condemned its people to poverty."

Opposition conservative New Democracy lawmaker Vangelis Meimarakis said he was expecting Tsipras to keep his pledge for a quick deal.

"If we don't have an agreement within 48 hours as the prime minister promised, then we are being led to a tragedy," he said.
___

Online:
Official referendum website: http://www.referendum2015gov.gr/en/
___

Derek Gatopoulos, Costas Kantouris and Menelaos Hadjicostis in Athens, Raf Casert in Brussels, Frank Jordans in Berlin and Carlo Piovano in London contributed to this report.

-- (c) Associated Press 2015-07-06

[TheAppletons]

Gee, what a surprise. The Greek people voted to NOT repay the billions of euros they owe.....and then acting like that's a major accomplishment.

Perhaps the Germans should hold a vote to ask their people if they want to keep giving away their money to Greece. Wonder what the outcome of that referendum would be?

[HeijoshinCool]

Good for them. Screw the euro.

[phantomfiddler]

The greeks, especially their prime minister, appear to be a complete bunch of morons with their "How dare you stop giving us money" approach. Good riddance to them. Was there many years ago and found the male of the species to be a complete bunch of winkers

[quandow]

Those who can't remember history . . .

http://www.usnews.com/news/business/articles/2015/07/02/the-case-for-greece-when-it-forgave-germanys-debt

[does]

How about an German opinion poll about who benefited the most from the Greek bailout - the Greek people or the German (and French) banks. Mr Simpleton....

Gee, what a surprise. The Greek people voted to NOT repay the billions of euros they owe.....and then acting like that's a major accomplishment.

Perhaps the Germans should hold a vote to ask their people if they want to keep giving away their money to Greece. Wonder what the outcome of that referendum would be?

[sammygood]

invade the country & make it a destination for all those africans that want to come in...they can go help to harvest the olives ...

[TimmyT]

"There was confusion Sunday night over the fate of bank safety deposit boxes, with Deputy Finance Minister Nadia Valavani saying people would be allowed to remove items but not cash from them, and Alternate Finance Minister Dimitris Mardas later said the issue would have to be legislated."

I can't believe it! people can't take money from their own safe deposit boxes?! I had no idea it's even possible in EU!

what will be the next? rummages at private homes and confiscations of any cash found?

Edited July 6, 2015 by TimmyT

[Srikcir]

Very unsurprising:

Tsipras gambled the future of his 5-month-old coalition government — and remains firmly in power.

With Greece out of the EU he can better consolidate his power and lead the Greek people to even greater auster times.

[trogers]

"There was confusion Sunday night over the fate of bank safety deposit boxes, with Deputy Finance Minister Nadia Valavani saying people would be allowed to remove items but not cash from them, and Alternate Finance Minister Dimitris Mardas later said the issue would have to be legislated."

I can't believe it! people can't take money from their own safe deposit boxes?! I had no idea it's even possible in EU!

what will be the next? rummages at private homes and confiscations of any cash found?

Greece would be having their Little Red Book and their Red Guards...

[BuaBS]

"There was confusion Sunday night over the fate of bank safety deposit boxes, with Deputy Finance Minister Nadia Valavani saying people would be allowed to remove items but not cash from them, and Alternate Finance Minister Dimitris Mardas later said the issue would have to be legislated."

I can't believe it! people can't take money from their own safe deposit boxes?! I had no idea it's even possible in EU!

what will be the next? rummages at private homes and confiscations of any cash found?

Are they going to consider Gold & Silver too as cash ? But but ...Bernake said is was a barbaric relic....

[micmichd]

"There was confusion Sunday night over the fate of bank safety deposit boxes, with Deputy Finance Minister Nadia Valavani saying people would be allowed to remove items but not cash from them, and Alternate Finance Minister Dimitris Mardas later said the issue would have to be legislated."

I can't believe it! people can't take money from their own safe deposit boxes?! I had no idea it's even possible in EU!

what will be the next? rummages at private homes and confiscations of any cash found?

What do you expect from a cleptocracy?

[MaxYakov]

"There was confusion Sunday night over the fate of bank safety deposit boxes, with Deputy Finance Minister Nadia Valavani saying people would be allowed to remove items but not cash from them, and Alternate Finance Minister Dimitris Mardas later said the issue would have to be legislated."

I can't believe it! people can't take money from their own safe deposit boxes?! I had no idea it's even possible in EU!

what will be the next? rummages at private homes and confiscations of any cash found?

1) It's Greece

2) Shhhhhhh

[kotsak]

And here is what will happen with the new currency and new prices

[MaxYakov]

"There was confusion Sunday night over the fate of bank safety deposit boxes, with Deputy Finance Minister Nadia Valavani saying people would be allowed to remove items but not cash from them, and Alternate Finance Minister Dimitris Mardas later said the issue would have to be legislated."

I can't believe it! people can't take money from their own safe deposit boxes?! I had no idea it's even possible in EU!

what will be the next? rummages at private homes and confiscations of any cash found?

What do you expect from a cleptocracy?

This:

Banks Prepare Plan to Raid Deposits to Avert Collapse - ft.com July 4, 2015

"The plans, which call for a “haircut” of at least 30 per cent on deposits above €8,000, sketch out an increasingly likely scenario for at least one bank, the sources said."

Edited July 6, 2015 by MaxYakov

[smedly]

Unfortunately the Greek people are being led down a path that will eventually lead to a humanitarian disaster that we are all going to have to pay for anyway, it's all fine and well taking to the streets and celebrating this supposed great victory but most of them had no real clue what they were actually voting for and how it was going to affect them in the coming days/weeks. They are about to find out when the ECB withdraws support for the banks.

First - they should never have been allowed to join the Euro, they remind me of Gypsies - taking from the state and tax payers but unwilling to contribute - change or play in any way.....spongers

Second - Why should other EU countries or better still their tax paying public give them another Cent, why should any other person in the EU agree to writing down any of the debt they have accumulated without the Greeks making any effort to cut back and reform spending, commercial banks already wrote off 50% of their loans. I myself have donated almost two years of my UK pension of some 17k sterling (at todays rates) due to an increase in pension age in the UK, as far as I'm concerned some of that went to Greece in loans but "they" are unwilling to cut their underserved generous pension rates or increase their pension age, they just want the handouts without the pain, and writing of any money loaned to them from the UK "for me" is like taking it right out of my pocket, (deleted) that.

The Greek people are being mislead manipulated and deceived by the current government who have been making pledges promises and commitments that are quite frankly impossible to keep and totally unreasonable to the rest of the EU member states and tax paying public - we all had to take a haircut why not Greece ? and why should we pay while they contribute nothing and change nothing.

I say let them see what they voted for - let the banks collapse - let their economy crash - let their state funds dry up - give them nothing more..............................................unfortunately it is the ordinary people that will suffer and it will be a humanitarian disaster and we will eventually have to bail them out and the cost will be much greater but they need to understand with a hard lesson and play the game going forward.................while the two divisive men Alexis Tsipras and his fellow communist Yanis Varoufakis will be removed and hopefully held accountable for what they have done.

Watching BBC last night they interviewed a Greek business owner who said life was difficult because people were spending less but he said his biggest problem (and this is a very key point) - his suppliers only ever wanted payment in cash, do I need to explain that one ? here's a clue, they don't want to pay tax - exactly why we in the rest of Europe are having to lend them hundreds of billions of Euro

[smedly]

Gee, what a surprise. The Greek people voted to NOT repay the billions of euros they owe.....and then acting like that's a major accomplishment.

Perhaps the Germans should hold a vote to ask their people if they want to keep giving away their money to Greece. Wonder what the outcome of that referendum would be?

Not only will there be no more money but there will also be no debt right off - why should anyone in the EU that has made a contribution to Greece (we all have) agree to either when they are unwilling to take a haircut like the rest of us, like I said above - a hard lesson needs to be learned now by these Greek "no vote" scroungers, unfortunately everyone is going to suffer though which is very unfortunate

[Lissos]

Good for them. Screw the euro.

You think they are saying screw the Euro, too? By accounts I've read, many Greeks clearly wish to stay in the Euro currency. What they voted no against was the conditions around another cash injection. It is stunning in the sense that a beggar has managed to rock the money giver by insisting the money giver provide a better package, but that's what this whole thing has been, a case of stare out and who blinks first because the Greeks 'know' how desperate the Euro project designers are to keep this whole house of cards standing at any cost - any cost!!

The Greeks have gambled and we shall see how it pans out. Angry people and politicians in the rest of Europe want Greece to think that if they don't take the crummiest offer then they'll be cast into oblivion, shunned, left to starve.

Wider Euro citizens may be in the mood to punish Greece in such a way for this vote, but it is the big wigs who matter in all this and that's what the Greeks are clearly aware of. It may seem absurd to us, but these people have balls. Reckless yes, but they believe that whatever way they turn now they are in for a very very rough ride regardless, so they may as well embark upon it with some shred of dignity left by demanding a loaf instead of crumbs while being shackled.

I 'get' that aspect of things. The question now is, will wider Europe cast them into oblivion for this? I believe the Greeks have been paying attention for years, to see that in actual fact wider Europe sees it as - "too important in the picture, to fail". It is quite possible that the ones who capitulate here are northern European politicians who are going to give Greeks everything they demand, and more, because they view Greece as too important a part of the European picture, to fail. Stunningly cheeky by the Greeks, but I admire their chess moves for sure. It exhibits how the Euro project is flawed in many ways.

[micmichd]

Someone came up with the idea of a refetndum in Germany. Germans were not even allowed a referendum about the Euro as German currency.

Anyway, here are some suggestions:

Banksters forced every German to open a current account. When they introduced it, it was free of charge and fees.

Hold a referendum about fees in Germany and ask people if they really want to pay them.

The interests you have to pay to a bank are higher than the interest you get.

Ask Germans if they really want it this way.

Edited July 6, 2015 by micmichd

[h90]

invade the country & make it a destination for all those africans that want to come in...they can go help to harvest the olives ...

That didn't work so well last time Germany tried it.

[h90]

The greeks, especially their prime minister, appear to be a complete bunch of morons with their "How dare you stop giving us money" approach. Good riddance to them. Was there many years ago and found the male of the species to be a complete bunch of winkers

I am undecided if he PM is a genius, who act complete crazy till the EU accept just any deal with him, or if he is a complete moron or in between, he sees that Greek can never pay it back and would be slave of the banks forever so he is trying to get the best deal possible.

[Baerboxer]

"There was confusion Sunday night over the fate of bank safety deposit boxes, with Deputy Finance Minister Nadia Valavani saying people would be allowed to remove items but not cash from them, and Alternate Finance Minister Dimitris Mardas later said the issue would have to be legislated."

I can't believe it! people can't take money from their own safe deposit boxes?! I had no idea it's even possible in EU!

what will be the next? rummages at private homes and confiscations of any cash found?

Sadly the EU becomes more and more like those old "people's socialist republics" of the Warsaw Pact. Individual freedoms are being eroded fast. European countries' governments can dip into your bank accounts at will and take what they want if a bank bail out is required. They don't currently have the legislation to rob your safe deposit box but looks like they will stop you taking your own cash out.

The world is run by bankers for bankers and it seems many governments do as they're told.

The EU countries strictly control the rights of its citizens to bear arms, to defend themselves, family and property. Now doesn't that just seem to help when the government tells you that you can't even take your own money out of a safe deposit box? Not even a bank account.

Bankers can screw you and your country, pay themselves disgustingly high salaries and immoral bonuses whilst doing it, and then steal your money to pay for things if it all goes wrong. And we let them get away with it.

[h90]

Someone came up with the idea of a refetndum in Germany. Germans were not even allowed a referendum about the Euro as German currency.

Anyway, here are some suggestions:

Banksters forced every German to open a current account. When they introduced it, it was free of charge and fees.

Hold a referendum about fees in Germany and ask people if they really want to pay them.

The interests you have to pay to a bank are higher than the interest you get.

Ask Germans if they really want it this way.

And don't forget the bank accounts in Germany aren't secret, every state agency can look into every bank account without even a reason for doing so.

[Baerboxer]

Good for them. Screw the euro.

You think they are saying screw the Euro, too? By accounts I've read, many Greeks clearly wish to stay in the Euro currency. What they voted no against was the conditions around another cash injection. It is stunning in the sense that a beggar has managed to rock the money giver by insisting the money giver provide a better package, but that's what this whole thing has been, a case of stare out and who blinks first because the Greeks 'know' how desperate the Euro project designers are to keep this whole house of cards standing at any cost - any cost!!

The Greeks have gambled and we shall see how it pans out. Angry people and politicians in the rest of Europe want Greece to think that if they don't take the crummiest offer then they'll be cast into oblivion, shunned, left to starve.

Wider Euro citizens may be in the mood to punish Greece in such a way for this vote, but it is the big wigs who matter in all this and that's what the Greeks are clearly aware of. It may seem absurd to us, but these people have balls. Reckless yes, but they believe that whatever way they turn now they are in for a very very rough ride regardless, so they may as well embark upon it with some shred of dignity left by demanding a loaf instead of crumbs while being shackled.

I 'get' that aspect of things. The question now is, will wider Europe cast them into oblivion for this? I believe the Greeks have been paying attention for years, to see that in actual fact wider Europe sees it as - "too important in the picture, to fail". It is quite possible that the ones who capitulate here are northern European politicians who are going to give Greeks everything they demand, and more, because they view Greece as too important a part of the European picture, to fail. Stunningly cheeky by the Greeks, but I admire their chess moves for sure. It exhibits how the Euro project is flawed in many ways.

You are absolutely right. All about what the big players want - Germany, France, the ECB, IMF, EU Eurozone finance ministers group. They will be operating in their interests to their agendas. Nothing else.

Greece is playing a dangerous game with them. Bottom line is many in Europe simplify this to someone who can't pay their debts, demanding more and then trying to dictate to the lender. May just backfire on the Greeks.

[luk AJ]

Gee, what a surprise. The Greek people voted to NOT repay the billions of euros they owe.....and then acting like that's a major accomplishment.

Perhaps the Germans should hold a vote to ask their people if they want to keep giving away their money to Greece. Wonder what the outcome of that referendum would be?

Not only will there be no more money but there will also be no debt right off - why should anyone in the EU that has made a contribution to Greece (we all have) agree to either when they are unwilling to take a haircut like the rest of us, like I said above - a hard lesson needs to be learned now by these Greek "no vote" scroungers, unfortunately everyone is going to suffer though which is very unfortunate

somebody understands this?....

[samran]

You lend money to people for whom you have a low expectation of them repaying...and then act all surprised?

Maybe the ECB bankers should move to Thailand...

[stevenl]

Apparently the Greek finance secretary has resigned. Another ploy to get more time and/or the old proposals of the table?

Edited July 6, 2015 by stevenl

[Rancid]

True the Greek economy suffers from too much regulation and too many public servants etc.

However it was the notorious Goldman Sachs that rigged their books to get them into the Euro, like the rest didn't know? Hmm.

However most economists agree the debt is unrepayable , so why bother kicking the can down the road and keep kicking the Greeks?

The bailouts were not even for Greece, they were mostly going to the banksters. All the bailouts did was make the debt bigger. Greeks should walk and take the pain and start a new.

The whole Euro thing is a waste of time and money anyway, just unelected bureaucrats living the high life as they lecture the serfs whose taxes pay them.

[h90]

Varoufakis just stepped back....

[Matej]

Greek voters decided nothing ... Referendum only was expensive show.

The final word will have ECB. Namely technocrats in Frankfurt. Today(ELA) or definitely July, 20(payment 3,5 billion euros).

difficult to make, I must say, for bankers

It's sad that some neo-communist and Putin's puppies, SYRIZA, buried 5 years of effort and hard work.

Anyone who think that ordinary people should vote in referendums about monetary policy, troika's requirements ... doesn't know what democracy really is, or don't know human nature.

Edited July 6, 2015 by Matej