GREEKS have stunned the European Union by voting overwhelmingly to reject the austerity terms demanded by the country’s international creditors.
With more than two-thirds of the votes counted, finance minister Yanis Varoufakis said the Greek people had sent back the “ultimatum” from the eurozone and the International Monetary Fund (IMF).
The result – with more than 60 per cent voting No – represents a sensational victory for the country’s radical left prime minister Tsipras Alexis, who had gambled all on the outcome of the referendum.
But it leaves the country facing an uncertain future, with opponents warning that he needs a new bailout deal fast if he is to avoid a catastrophic financial crash that could send the country spinning out of the single currency.
With Greek banks rapidly running out of cash, German chancellor Angela Merkel and French president François Hollande – the leaders of the two biggest eurozone members – will meet today in Paris for crisis talks. They have called for an EU summit tomorrow.
In London, David Cameron will meet with Chancellor George Osborne, Bank of England Governor Mark Carney and other senior officials to discuss the likely impact on the UK.
This is guidance for the government to move forward quickly to seek a deal and normalise the banking systemNikos Filis, Greek government spokesman
Mr Osborne warned that the UK could not be totally insulated from any financial turmoil.
“I don’t think anyone should be in any doubt – the Greek situation has an impact on the European economy which has an impact on us. We cannot be immune from these developments.”
The head of the Greek Banks’ Association has warned that cash is only going to last until tomorrow. Although banks are expected to re-open tomorrow, it would be almost impossible without a large infusion of cash.
Despite this, in Athens last night, jubilant supporters of the Syriza government poured into Syntagma Square opposite the Greek parliament to celebrate what they regarded as a famous triumph and a decisive rejection of austerity.
‘Austerity measures have driven people into poverty’
“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,” said Athens resident Yiannis Gkovesis, 26, holding a large Greek flag in the city’s main square.
Mr Varoufakis said that the Greek government would now reach out to the institutions – the IMF, the European Commission (EC), and the European Central Bank (ECB) – to try to find an agreed way forward.
He said: “With this No we will try to co-operate with our partners and we will invite them one by one to see if we can find some common ground.”
However, it was far from clear what appetite there would be among the creditors for fresh talks, with trust on both sides apparently at rock bottom.
Greek opposition leader Antonis Samaras announced his resignation after losing the referendum.
Mr Samaras, 64, the former prime minister, announced his decision to step down in a televised address after campaigning for a Yes vote.
He urged the Greek people to put divisions behind them and hold the government to its promise to find a quick agreement with creditors.
Millions of citizens took to the polls in Greece’s first referendum in 41 years to vote on whether the country should accept the terms of an international bailout package put forward by the EC, the ECB and the IMF.
Mr Tsipras turned up to vote in his Athens neighbourhood of Kipseli yesterday, where around 100 supporters chanted “Oxi, oxi, oxi” (“No, no, no”) as he approached the polling station.
He insisted that a No vote would strengthen his hand to negotiate a better deal with creditors, while a Yes result would mean capitulating to their harsh demands.
European leaders have warned that a No vote would jeopardise Greece’s place in the euro, which in turn could see the eurozone face financial turmoil.
Mr Tsipras’s high-stakes stand-off with lenders from the eurozone countries and the MF resulted in Greece defaulting on its debts and shutting down the country’s banks to avoid them collapsing.
On the streets of Greece’s towns and cities, onlookers have reported queues at ATMs, many of which are now either empty – or only dispensing €50 notes, despite a €60 limit on withdrawals imposed for most people.
President Prokopis Pavlopoulos urged Greeks to remain united, amid fears that the referendum would prove divisive.
“This day belongs to the citizen alone,” he said yesterday as he cast his vote.
“He is called to decide, in accordance to his conscience and exclusively guided by the national best interests, on the future of our country and our people.”
He added: “This is what our forebears did at crucial times and this is our obligation today. We proceed, therefore, all together.”
The ECB is today set to decide if it will provide emergency liquidity assistance to Greek banks. Greek financial media have reported that the Bank of Greece will ask the ECB for €6 billion (about £4.2bn) in emergency assistance.
If it does not receive this funding, it is thought that Greece will have no option other than to return to the drachma, the currency it used before it joined the euro in 2001.
EC president Jean-Claude Juncker had warned that Greece’s position in the euro would be “dramatically weakened” by a No vote.
However, German finance minister Wolfgang Schaeuble yesterday suggested that if Greece were to leave the eurozone, it might only be a temporary move.
“Whether with the euro or temporarily without it: only the Greeks can answer this question,” he said in an interview with a German newspaper.
“And it is clear that we will not leave the people in the lurch.”
Among the first politicians in Scotland to react to last night’s result was Scottish Greens co-convener Patrick Harvie MSP.
He said: “This vote shows austerity has failed and those bearing the brunt will no longer put up with it.”