Demonstrators shout slogans during a rally organized by supporters of the YES vote for the upcoming referendum in front of the Greek Parliament in Athens
Greece’s government has made new concessions in talks with its creditors, though some European officials said they were still not good enough and that a deal was nevertheless impossible before a Greek referendum on Sunday.
Prime Minister Alexis Tsipras sent a letter Tuesday night (early yesterday, Macau time), just hours before the country’s bailout program was due to expire, saying his government was prepared to accept creditors’ proposals made last weekend, subject to certain amendments.
The creditors did not accept Greece’s new overture, leaving the country’s bailout program to expire. But eurozone finance ministers were to meet again yesterday to discuss the terms again. Hopes that Tsipras was softening his position — after refusing for five months the spending cuts that creditors had demanded in exchange for loans — boosted markets yesterday.
But German Finance Minister Wolfgang Schaeuble was clear that no deal was imminent, at least not before Greece holds a popular vote on the creditors’ proposals on Sunday.
“Before a referendum, there is indeed no basis (for an agreement),” Schaeuble said.
In Athens, crowds of anxious elderly Greeks thronged banks for hours from before dawn yesterday, struggling to be allowed to withdraw their maximum of 120 euros (USD134) for the week after the government reopened some banks to help pensioners who don’t have bank cards.
Greece is in a financial limbo now that its bailout program has expired, cutting it off from vital financing and pushing it one step closer to leaving the euro. The country has put limits on cash withdrawals in order to keep banks from collapsing.
Its situation was further worsened Tuesday when it failed to repay a debt to the International Monetary Fund, the first developed country to do so. The last country to miss an IMF payment was Zimbabwe in 2001. As long as it is in arrears on the payment to the IMF, one of the country’s main creditors, Greece cannot get any more money from the organization.
Greece’s crisis took a turn for the worse after Prime Minister Alexis Tsipras announced last weekend that he would put a deal proposal by Greece’s international creditors to a referendum on Sunday, July 5, and urged a “No” vote.
The move increased fears the country could soon fall out of the euro and saw Greeks rushing to pull money out of ATMs, leading the government to shutter its banks and restrict banking transactions. Greeks are now limited to ATM withdrawals of 60 euros ($67) a day and cannot send money abroad or make international payments without special permission.
European officials and Greek opposition parties have been adamant that a “No” vote on Sunday will mean Greece will leave the euro and possibly even the EU. The government rejects the argument as scaremongering, and says dismissing creditor demands will mean the country is in a better negotiating position.
However, government officials have begun hinting that the referendum might not go ahead if agreement with creditors is reached this week.
“Look, if a deal is found, there is a chance there could be this possibility too. Everything is developing,” Health Minister Panagiotis Kouroumplis said when asked during a morning news show on Antenna television whether the referendum could be called off under certain circumstances.
On Tuesday night, Deputy Prime Minister Yannis Dragasakis hinted the same. The government decided on the referendum, he said on state television, “and it can make a decision on something else.”
It was unclear, however, how that would be possible as Parliament has already voted for the referendum to go ahead. Elena Becatoros, Athens, AP
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