Greek Prime Minister Alexis Tsipras said on Monday he would respect a potential Greek decision to stick to the path of austerity as prescribed by foreign creditors, but his government would not be the one to carry it out.
Responding to speculation he will have to resign if Greeks vote in a July 5 referendum to accept a reform-for-aid deal that he has already rejected, Tsipras told state television: “If the Greek people want to proceed with austerity plans in perpetuity, which will leave us unable to lift our heads … we will respect it, but we will not be the ones to carry it out.”
The 40-year-old premier, speaking as thousands of Greeks rallied in central Athens in support of a “No” vote, urged voters to throw out the deal. Greece’s European partners have said this could see the country driven from the 19-nation euro zone and plunged deeper into financial turmoil.
But Tsipras dismissed talk of a return to the drachma. “I don’t think that their plan is to push Greece out of the euro but to end hopes that there can be different policies in Europe,” he said.
With Athens set to default on a 1.6 billion-euro loan installment to the International Monetary Fund on Tuesday, Tsipras said he stood ready to talk to European leaders. If they were to offer a deal on Monday night, he said, Greece would pay its debt on Tuesday.
“My phone is on all day long. Whoever calls, I always pick up.”
In the most direct admission yet by a top ECB policymaker that a “Grexit” could happen after Athens decided to interrupt talks on an aid-for-reforms package and call a referendum for July 5, European Central Bank executive board member Benoit Coeure said on Monday it was now possible that Greece may end up exiting the euro zone although this was not what the ECB wanted.
“A Greek exit from the euro zone, so far a theoretical issue, can unfortunately not be excluded any more,” Coeure told French financial daily Les Echos.
Coeure said that if Greeks vote “Yes” in the referendum, he “has no doubt” euro zone authorities will find ways to meet commitments towards Greece.
If the “No” vote wins, “it would be very difficult to resume political dialogue,” he said.
At least 20,000 defiant supporters of Tsipras’ left-wing government packed the main avenue in front of parliament, rallying behind his call to reject the package and more austerity.
Many banners declared simply “No!” Others said, “Our lives do not belong to the lenders” and “Don’t back down”.
“I left Greece two years ago because I couldn’t get a job,” said Thanos Tsapelis, 37 and newly married on Sunday to Eleni, a teacher at a Greek school in Britain. “We want austerity to end so we can return to Greece and find a job.”
European Council President Donald Tusk told Tsipras on Monday that he saw no willingness among member states to agree to Tsipras’ request to an extension to bailout loans.
“After consultations with the leaders, in the absence of new elements, I see no willingness to go against the positions expressed by finance ministers at their June 27 meeting,” Tusk said in a letter seen by Reuters that was sent in reply to request from Tsipras for a one-month extension of credits.
The letter reflected a closing of ranks by EU leaders after Tsipras called a referendum on the creditors’ offer of cash for reforms and urging Greeks to reject it next Sunday.
Tusk said that a process for negotiations was agreed at a euro zone summit he had called last Monday and reaffirmed at an EU summit on Thursday and Friday.
“Unfortunately,” Tusk wrote, “Your government broke off programme negotiations.”
He said that following the expiry on Tuesday, June 30, of the bailout programme, Greece could apply for new assistance.
“In Europe, the door for negotiations always remains open in a spirit of solidarity and responsibility,” Tusk said.
Earlier on Monday stunned Greeks faced shuttered banks, long supermarkets lines and overwhelming uncertainty.
Prime Minister Alexis Tsipras pleaded by phone with European officials to extend the programme until a referendum on Sunday on its future terms.
The frantic efforts to secure Greece’s place within the euro zone followed a dramatic weekend. Tsipras’s decision, early on Saturday, to put the aid package to a popular vote took the lenders and some of Tsipras’ own negotiating team by surprise.
It also pushed Greece towards defaulting on 1.6 billion euros ($1.77 billion) due to the International Monetary Fund on Tuesday.
Greeks – used to lengthy talks with creditors before an eleventh-hour deal – were left shocked by the turn of events. Lines snaked outside ATMs and inside supermarkets while fears of disruptions to petrol and medicine supplies grew.
The breakdown has pushed the European Union and euro zone into uncharted terrain. Financial markets reacted badly on Monday, with European bank shares down sharply on worries of contagion within the financial system.
“I can’t believe it,” said Athens resident Evgenia Gekou, 50, on her way to work. “I keep thinking we will wake up tomorrow and everything will be OK. I’m trying hard not to worry.”
After months of talks, Greece’s exasperated European partners have put the blame for the crisis squarely on Tsipras for rejecting a package they consider generous. The Greek side says further austerity would simply deepen one of the worst economic crises of modern times in a country where a quarter of the workforce is already unemployed.
Emotions were unusually raw among Europe’s leaders. EU Commission President Jean-Claude Juncker said he felt personally betrayed and told Greeks a “no” vote would point to a euro exit.
“I will say to the Greeks who I love deeply: you mustn’t commit suicide because you are afraid of death,” he told a news conference.
French President Francois Hollande appealed to Tsipras to return to the negotiating table and German Chancellor Angela Merkel said she was willing to talk to the Greek leader if he wanted.
The Greek government will keep banks shut at least until after July 5, the date of the referendum, and withdrawals from automated teller machines were limited to 60 euros a day when they reopened at midday. The stock exchange will also stay shut.
The creditors wanted Greece to cut pensions and raise taxes in ways that Tsipras has long argued would be counter-productive.
