As Greece heads to a referendum on Sunday that could decide its future in the euro zone, long queues at cash machines have become the most potent symbol...
As Greece heads to a referendum on Sunday that could decide its future in the euro zone, long queues at cash machines have become the most potent symbol of the cost of the deadlock between the left-wing government and its international lenders.
Prime Minister Alexis Tsipras’ rejection of what he terms the “blackmail” of EU and IMF creditors demanding spending cuts and tax hikes has so angered Greece’s partners that there is no hope of reconciliation before Sunday’s vote on the issue.
With banks closed for a fourth day and capital controls in place, Finance Minister Yanis Varoufakis tied his fate to the outcome of the vote, saying he would resign if the government’s call for a “no” to the bailout terms were ignored. The future of Prime Minister Tsipras would be similarly in doubt.
“People have lost it completely. And it’s all the fault, one hundred percent, of all the politicians. They are to blame for the situation we are in now,” said pensioner Thanos Stamou.
On Sunday then it will fall to the Greek people to decide an issue that their government was unable to settle in months of acrimonious negotiations with their European partners.
“The future of Greece is in the hands of the Greek people,” said Jeroen Dijsselbloem, the Dutch chairman of the Eurogroup of euro zone finance ministers.
“If the outcome is positive, then there is naturally, on the European side, the willingness to help Greece out of the gutter,” he said. “If the result is negative, then the future will be a lot more complicated.”
For Tsipras, the stakes are high. His government is expected to fall if voters back a bailout plan which he has rejected as a “humiliation” for Greece.
Already, his coalition is crumbling as a succession of deputies from the right wing Independent Greeks party, his junior partners have thrown their weight behind the ‘Yes’ vote.
Tsipras and his finance minister Varoufakis remain convinced Athens could negotiate better terms, including debt relief, if Greek voters reject the conditions on offer.
Asked by Bloomberg Television whether he would still be in office on Monday evening if Greeks voted “yes”, Varoufakis, a Marxist economics professor, said: “I will not … I personally will not sign another extend and pretend (agreement).”
The only full poll to be released since the referendum was announced at the weekend showed the “No” vote ahead but with support slipping sharply and the “Yes” camp rising after the announcement that banks would be shut.
Another poll, compiled for French bank BNP Paribas and published on Greek news site euro2day showed “Yes” in the lead by 47 to 43 percent although the head of pollsters GPO, which conducted the survey, told Greek television it was just a partial snapshot from one day and opinion was very volatile.
Financial markets, which have been relatively unmoved by the crisis were more nervous on Thursday, with the borrowing costs of Spain and Italy hitting their highest levels in several months.
For Greek voters, the sight of banks closed and long lines of pensioners queuing for cash has been a deep shock and a reminder of the potential cost of being shut out of the euro, the symbol of Greece’s membership of modern Europe.
“People are waiting just to take out 50 euros, and we see the government does nothing, they do nothing,” said 47-year-old lawyer Nicole Papathanasopoulo, expressing the bewilderment many feel after repeated rounds of offers and counter-offers.
“They send a third proposal and at the same time they ask the people to say their opinion about the proposal that doesn’t exist any more. It’s crazy. We don’t know what to do.”
“PEOPLE HAVE LOST IT COMPLETELY”
The leftwing government came to power in January vowing to protect pensioners and much of the breakdown in relations with international creditors centred on its refusal to accept the cuts in pensions that the lenders demanded.
In a country where one in four of the workforce is without a job, the plight of the pensioners, whose monthly benefits can often be the only source of income for families, is an acutely sensitive issue.
In a bid to reassure voters, State Minister Nikos Pappas, one of Tsipras’ closest aides, denied speculation that the government would impose a levy on bank deposits.
He insisted that banks would reopen “the minute we get a clear result”, although bankers are increasingly sceptical that this will be possible by Tuesday unless the European Central Bank lifts the ceiling on emergency funding it provides.
“We might run out of banknotes by Tuesday if people keep taking out 60 euros a day,” one senior banker said.
Mindful of the fact that many older Greeks do not use credit or debit cards and so do not have access to cash machines, the government has ordered 1,000 banks to open across the country to pay out a maximum of 120 euros and issue cards.
But in the process it has created a compelling reminder of the costs its confrontation with the lenders is inflicting on a society already deeply scarred by more than five years of harsh austerity imposed under successive bailout accords.
“In line for a handful of euros,” the conservative Eleftheros Typos newspaper headlined on Thursday. “The dignity promised by Tsipras turns into humiliation for thousands of pensioners”.
Credit ratings agency Standard and Poor’s warned that Greece’s economy would contract by another 20 percent within four years if the country made a distressed exit from the euro. Greek GDP has already shrunk by 25 percent since 2009, and more than a quarter of the workforce is unemployment, including more than one in two young people.
A so-called Grexit would worsen an already desperate situation for Greek banks, and would have severe consequences for the economy and non-financial companies, S&P said.
However even for Greeks with a lot to lose, the resentment towards lenders blamed for squeezing society to its limits means the result of the vote remains hard to predict.
Konstantinos Nikolopoulos, a 70-year-old former employee of U.S. entertainment group Warner Bros, emerged from his bank empty-handed after being told that benefits from his pension fund were not being paid out.
Even so, he was ready to contemplate a vote that could set his country on a path out of the euro.
“On Sunday, I am slightly confused,” he said. “I believe the message should be that the Greek people has to take a decision to settle its debt with a fair compromise, I am leaning more to voting ‘No’.”