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Greek Finance Minister, Yanis Varoufakis, Accuses Creditors of Terrorism for Closing Greek Banks and Spreading Fear

 July 4, 2015

 

Greek Prims Minister, Alexis Tsipras, right, and his Finance Minister, Yanis Varoufakis

 

On eve of referendum, Greek finance minister accuses creditors of ‘terrorism’

France 24, AFP: 2015-07-04

Greek Finance Minister Yanis Varoufakis accused Athens' creditors of "terrorism" in an interview published on Saturday, a day before Greeks vote in a high-stakes referendum on their bailout.

"What they're doing with Greece has a name -- terrorism," the blunt-spoken Varoufakis told the Spanish El Mundo daily. "What Brussels and the troika want today is for the 'yes' (vote) to win so they could humiliate the Greeks."

"Why did they force us to close the banks? To instill fear in people. And spreading fear is called terrorism," he said, referring to the IMF, European Central Bank and European Union.

After failing to reach a deal with its creditors last weekend on an extension of its bailout programme, Greece's radical leftist government closed the country's banks and imposed capital controls until July 6.

Varoufakis said that whatever the result of Sunday's vote, in which the government is calling for a 'no' vote, the banks would reopen and Athens would end up reaching an accord with its creditors.

"Europe needs an agreement, Greece needs an agreement, meaning we will reach an agreement," he said, reiterating a pledge to resign if the 'yes' vote carried the day.

The flamboyant economist, who has become one of Europe's most recognisable politicians in the few short months since he took office, also repeated that the "troika" of creditors wanted to "humiliate Greeks" and make them an example of what not to do for other countries, like Spain, where radical left-wing parties are on the march.

Referring to Syriza's Spanish ally Podemos, he said: "I think that in Europe there is a need for parties like Syriza and Podemos, which are both critical of the system and pro-European and democratic. Those who hate us want to cast us as anti-European but it's not true, we are not."

 

Greece’s Tsipras says IMF report bolsters ‘no’ vote

FRANCE 24 with REUTERS, AFP, 2015-07-04

Greek Prime Minister Alexis Tsipras on Friday said an IMF report on the country’s desperate debt situation justified his government’s decision to reject an aid package from creditors in a referendum vote on Sunday.

Tsipras once more urged citizens to vote ‘no’ to a new bailout deal that includes more spending cuts and tax hikes in a televised address to the nation on the final day of campaigning before the key ballot.

“Yesterday an event of major political importance happened,” Tsipras said. “The IMF published a report on Greece’s economy which is a great vindication for the Greek government as it confirms the obvious - that Greek debt is not sustainable."

The prime minister said a so-called “Grexit” from the European Union was not part of the referendum ballot, only the debt relief package his government has termed “blackmail” by EU lenders and the IMF.

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“Let us calmly go to the polls, and make our choice by weighing the arguments,” Tsipras said of the referendum observers say is too close to call. “No one doubts Greece’s place in Europe.”

EU leaders have warned that a “No” victory would seriously jeopardise Greece's place in the 19-nation eurozone. Tsipras has said it will strengthen his position at the negotiating table and allow him to win a better deal from creditors.

Dignity

His address came only hours after Greece was officially declared in default by the fund providing it with a financial lifeline, and as opposing “Yes” and “No” campaigns organised rallies in the capital of Athens.

‘No’ campaigners gathered on Syntagma square in front of the Greek parliament, where Tsipras urged them to spurn the harsh terms of an aid deal offered by Greece’s creditors.

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"On Sunday, we are not just deciding that we are staying in Europe, but that we are deciding to live with dignity in Europe," he told the crowd of at least 50,000.

Meanwhile, a smaller crowd of ‘Yes’ supporters gathered in front of the old Olympic Stadium to Beethoven’s Ode to Joy, the anthem of the European Union.

The rival rallies laid bare the deep divide heading into a referendum that may decide the country's future in Europe's single currency.

Three opinion polls published on Friday had the 'Yes' vote marginally ahead; a fourth put the 'No' camp 0.5 percent in front, but all were well within the margin of error.

Germany rules out quick deal

Anxiety has been spreading in Greece amid government-forced bank closures and capital controls that have reduced Greeks to lining up at ATMs to make daily withdrawals capped at 60 euros ($67).

The European Financial Stability Facility, set up by the the EU to provide aid to debt-ridden member states, has refrained from immediately demanding repayment of its loans, though adding that it was reserving the right to call in €130.9 billion of debt ahead of time after Greece defaulted on a debt owed to the IMF.

In his speech on Friday, Tsipras spelt out debt restructuring demands he wants international creditors to adopt.

He called for “a 30 percent haircut off the Greek debt” and “a 20-year grace period” for the rest, to ensure “the viability of debt” in Greece, which currently stands at nearly 180 percent of its gross domestic product.

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But German Finance Minister Wolfgang Schäuble warned that any new negotiations with Greece on its debt after the referendum would take time to produce results.

In an interview with the mass-market Bild newspaper, Schäuble said such talks would take place "on an entirely new basis and under more difficult economic conditions".

"It will take a while," he warned.

 

IMF warns of huge financial hole as Greek vote looms

France 24, AFP, AP, Reuters, 2015-07-03

Duelling rallies were expected in Greece on Friday, a day after the IMF warned of the huge financial hole facing Greece as angry and uncertain voters prepare for a Sunday referendum that could decide their country’s future in Europe.

Days after Greece defaulted on part of its debt, the IMF (International Monetary Fund) – part of the “troika” of lenders behind successive international bailouts – said Greece needed an extra €50 billion over the next three years, including €36 billion from its European partners, to stay afloat. It also needed significant debt relief.

The assessment, in a preliminary draft of the IMF’s latest debt-sustainability report, underlines the scale of the problems facing Athens, whatever the result of Sunday’s referendum on the bailout offered by creditors last month.

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.

With banks closed for a fourth day and capital controls in place, the future of the left-wing government hangs on the result, given the angry mood of voters in Greece, torn between resentment of the lenders and scorn for their own politicians.

“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 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.

Consequences of the referendum

“We are asking them to vote with their eyes open and think hard about all the consequences of a ‘No’ vote, which could lead Greece to leave the euro zone,” French Prime Minister Manuel Valls said on the sidelines of an economic summit in Lyon.

The comment reflected the fear of many in the euro zone that a Greek exit would change the nature of a 15-year-old currency union intended to be unbreakable.

For Tsipras, if voters back a bailout plan that he has scorned, his government is likely to fall, leading to new elections by September.

Already, his coalition is crumbling as a succession of deputies from the right-wing Independent Greeks, his junior partners, have backed the ‘Yes’ vote.

Tsipras and his finance minister, Yanis Varoufakis, remain convinced Athens can negotiate better terms, including debt relief, if voters reject the conditions on offer. But both have signalled they will quit if voters choose the bailout.

“I want to believe that these problems won’t last long,” Tsipras said on Thursday of the bank closures. “The banks will open when there is a deal,” he said in a television interview, predicting it would come within 48 hours of the referendum.

Tsipras’ government came to power in January vowing to protect pensioners, and much of the argument with creditors stemmed from his refusal to accept the pension cuts that they demanded.

With unemployment over 25 percent, and youth unemployment over 50 percent, the plight of pensioners, who may be providing the only source of income for families, is acutely sensitive.

Both ‘no’ and ‘yes’ vote supporters will bring their campaigns to an end on Friday with simultaneously held rallies.

The events will happen 800 metres (875 yards) apart in the centre of Athens.

Protests in Paris

Thousands of French protesters also took to the streets Thursday, urging Greek voters to reject austerity imposed by the European Union in an implicit call for them to vote “no” in a weekend referendum on a cash-for-reform deal with creditors.

The protest in Paris, organised by left-wing rebels within the ruling French Socialist party, goes against the line pushed by President François Hollande’s government that a “no” vote would be a dangerous step towards a possible exit from the euro zone.

Police put the number of protesters in the Bastille Square, a focal point of the 1789 French revolution and a traditional rallying place for protesters, at around 3,000.

But a Harris Interactive opinion poll showed two thirds of those questioned in France wanted European countries to stop lending to Greece and 53 percent believe Greece will not pay back any its debts. Only 4 percent think it will pay everything back.

The IMF analysis suggested that, even on the most optimistic assumptions, the Greek economy would remain on life support for many years to come, and that Athens would be forced to persuade its European partners to help.

The ratings agency Standard and Poor’s said Greece’s economy, which has already shrunk 25 percent since 2009, would contract by another 20 percent within four years if it made a distressed exit from the euro.

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