Greeks unity threatened in knife-edge referendum

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84e26beb-b6a8-4d2f-be79-8fa499e4e8c8.imgGreeks were voting on Sunday in a controversial referendum called just one week ago that may determine the country’s future as a member of the eurozone.

Alexis Tsipras, Greece’s prime minister, fought through a crowd of at least 100 camera crews packed into a school in central Athens to cast his vote. Addressing the scrum of reporters afterwards, Mr Tsipras said his country had the right to determine its own “destiny” in Europe.

“No one can ignore the will of the people to live, to live with determination, to take their destiny into their own hands,” he said, looking relaxed and smiling in an open-necked white shirt with his sleeves rolled up.

Last-minute opinion polls indicated a knife-edge result, with voters narrowly favouring Mr Tsipras’s call for a No vote to reject a last-ditch bailout offer by Greece’s creditors, even though it has already expired.

Between 51 and 53 per cent of voters would back No, according to one unpublished poll seen by the Financial Times.

The plebiscite, the first in Greece since 1974, took place amid mounting uncertainty, with banks shuttering their doors following the imposition of capital controls to prevent a bank run, and a tense stand-off between Mr Tsipras and the creditors — the European Commission, the International Monetary Fund and the European Central Bank.

Greek banks are fast running out of cash. But the ECB will not provide any more emergency loans before a scheduled conference call of its governing council on Monday afternoon, an official said.

The vote went ahead after Greece’s highest court said it was not competent to rule on a claim that the referendum violated Article 44 of the constitution, which bans holding a plebiscite on a financial issue.

Several voters leaving a polling station in central Athens said they were confused by the convoluted, 72-word question, which referred to two technical documents, “the current [bailout] programme” and a “preliminary debt sustainability analysis”.

“If you hadn’t followed the campaign this past week and just read the question on the ballot paper you would have no idea what the vote was really about,” said Aristea, a civil servant in her 40s.

Her husband, Markos, an architect, said: “This whole process has bordered on the undemocratic, no matter what the prime minister said in his speeches and interviews about respecting democracy and the people.”

Polling stations were set to close at 7pm local time (5pm in London) with full results expected before midnight, according to an interior ministry official.

The referendum has split Greece along faultlines that have emerged during the country’s wrenching, five-year recession, according to pollsters. Young voters, the unemployed and owners of small businesses struggling to survive were expected to vote No, while older Greeks with jobs and savings stashed abroad would vote Yes.

Panayotis, a 27-year-old unemployed political science graduate, said he voted No because “things couldn’t get worse . . . No is going to win and the foreigners [the EU and IMF] will understand they have to do things differently.”

In depth

Greece has defaulted on a €1.6bn loan repayment to the International Monetary Fund becoming the first advanced economy to do so in the institution’s 71-year history
Members of the leftwing Syriza-led government tried to reassure voters on Friday, claiming that banks would reopen by Tuesday regardless of the outcome of the referendum.

But a No vote could mean that negotiations with creditors, which were suspended by Mr Tsipras’s decision to hold the referendum, may not be resumed immediately, if at all.

Martin Schultz, president of the European parliament, said that Greece would be forced to print its own currency in the event of a No vote, a move that would be incompatible with its euro membership.

Even if there are limits to how much support the ECB can give to the Greek banking system, Benoît Coeuré, a member of its executive board, said it stood ready to do more to support the bloc.

“If we are needed to do more [to support the eurozone], we will do it,” he told a conference in Aix-en-Provence. “There should be no doubt about that.”

The ECB is widely expected to front-load asset purchases undertaken as part of its quantitative easing programme should events in Greece drive up yields on the bonds of other eurozone member states.

Jean-Claude Trichet, former ECB president, who was also at the gathering, said there was a real risk of financial contagion, even if it was “relatively small”.

“The probability of a catastrophe is high” in case of a No vote, Mr Trichet told the Financial Times. A Greek exit would also pose a systemic risk to the eurozone by creating a precedent and could lead to geopolitical risk with Greece situated in an unstable part of the world, he warned.

Emmanuel Macron, French economy minister, said at the conference that whatever the outcome of the referendum, talks needed to resume between the debt-laden country and its creditors.

“Even if there is a No vote, our responsibility will be to avoid a Versailles treaty of the eurozone,” Mr Macron said, referring to the tough conditions imposed on Germany after it lost the first world war. “If the No wins, it would be a historic mistake to crush the Greek people.”

French president François Hollande would speak to German chancellor Angela Merkel later today to co-ordinate a response, Mr Macron added.

Even a Yes vote raises many uncertainties, especially if Mr Tsipras remains in office. Many eurozone policy makers now deeply distrust him and doubt whether he would agree to make concessions on tax increases and pension cuts that could split the Syriza party.

Wolfgang Schäuble, Germany’s hardline finance minister, damped hopes of any rapid bailout deal following a Yes vote. Any further negotiations would be “on a completely new basis and under difficult economic conditions”, he told Bild newspaper on Saturday.

“That will take a while,” he said. The situation in Greece had “deteriorated dramatically in recent weeks”.

Additional reporting by Michael Stothard in Aix-en-Provence

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