Merkel rules out deal ahead of vote
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GREECE’S government yesterday pressed ahead with its plan to put austerity measures to voters after European creditors rebuffed its latest proposal for a new aid program. But finance ministers are still discussing the country’s situation and nothing seems set in stone.
Many European officials had ruled out any deal with Greece before a referendum called by Prime Minister Alexis Tsipras for Sunday. He is asking Greeks whether they want to accept creditors’ reform proposals in return for rescue loans.
Tsipras said yesterday that the referendum would go ahead and called on the people to vote “no.” In a televised address to the nation, he said a “no” result would not mean Greece would have to leave the euro, as many European officials have argued.
Rather, Tsipras said, it would give the government a stronger negotiating position with creditors. “There are those who insist on linking the result of the referendum with the country’s future in the euro,” Tsipras said.
“They even say I have a so-called secret plan to take the country out of the EU if the vote is ‘no.’ They are lying with the full knowledge of that fact.”
The hastily called referendum is based on creditor reform proposals made last week as part of a negotiation with the Greek government.
But they were later updated and are now no longer on the table as the European part of Greece’s bailout program expired at midnight on Tuesday.
The head of a top European intergovernmental institution told reporters that any such referendum would fall short of international standards.
The Council of Europe, an independent body that monitors elections and human rights, has no enforcement capacity. But the declaration of its chief, Thorbjorn Jagland, that the referendum would not meet international standards was a major blow.
Such standards call for at least two weeks’ notice to allow for discussion, a clear question to be put to voters for consideration, and international observers invited to monitor the vote.
This vote, Jagland said, “has been called on such a short notice. That this in itself is a major problem.”
He said the question put to the people was “not very clear” and said that the Council of Europe, which monitors votes, had not been invited to do so.
Eurozone finance ministers were to discuss Greece’s new offer made on Tuesday and Tsipras sent a letter to creditors saying his goverment was prepared to accept their proposals, subject to certain amendments.
Some European countries — including Germany, the largest single contributor to Greece’s bailout — said the proposal wasn’t good enough and that a deal remained impossible in any case before the referendum.
“We will wait for the referendum,” Chancellor Angela Merkel told the German Parliament. “There can be no negotiations on a new aid program before the referendum.”
But French President Francois Hollande urged an accord before then.
Hollande said it was the responsibility of other countries that use the shared currency to keep Greece in the eurozone.
“We have to be clear. An accord is for right now, it will not be put off,” he said. “If it doesn’t happen, we would have to wait for a referendum, but there is always a risk” of turbulence and a “leap into the void.”
Hollande, who has been one of the few remaining EU allies of Greece’s government, criticized “intransigent comments” and “vetoes or roughness,” in an apparent reference to Germany’s tough stance.
“It is our duty to keep Greece in the eurozone,” he said. “That depends on Greece ... but it also depends on us.”
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. It also has become the first developed country to fail to repay a debt to the International Monetary Fund on time. The last country to miss an IMF payment was Zimbabwe in 2001.
As long as it is in arrears on the IMF payment, Greece cannot get any more money from the organization.
The country has put limits on cash withdrawals to keep banks from collapsing after Greeks rushed to pull money out of ATMs following the referendum call at the start of the weekend.
In Athens, crowds of elderly Greeks thronged banks from before dawn yesterday, aiming to withdraw their permitted 120 euros (US$133) for the week after the government reopened some banks to pensioners . Greeks are limited to daily ATM withdrawals of 60 euros (US$67) and cannot send money abroad without special permission.
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