Early results show Greece votes “no” to Europe’s bailout offer
NEW YORK (CNNMoney) – With about half the votes counted, more than 60% had voted “no,” backing Prime Minister Alexis Tsipras’ hardline rejection of austerity.
The result — if confirmed — will set Greece on a very uncertain path that could force it to abandon the euro and print its own currency.
Greece urgently needs more money to reopen its banks, which have been shut for a week, and to pay pensions and wages.
Tsipras urged people to vote “no” because he hopes to strike a better deal. He now plans to ask Greece’s creditors for more loans, on easier terms.
How Europe and the International Monetary Fund will respond is unclear. They’ve already rescued Greece twice since 2010, with loans totaling 240 billion euros.
Before the referendum, European leaders said a “no” vote would destroy the basis for talks, because it would show that Greece was unwilling to take the steps needed to put its finances in order and get its economy growing faster.
Creditors also said a new bailout could mean even harsher austerity than the offer that was on the table.
German Chancellor Angela Merkel and French President Francois Hollande are due to meet Monday evening in Paris to discuss the implications of the referendum.
The European Central Bank will also meet to discuss the crisis.
Many Greeks have had enough years of cuts to wages and pensions. They would rather reclaim control of their economy by leaving the eurozone and returning to the drachma.
The huge devaluation and impoverishment that implies terrifies others. They want Greece to keep the euro, and stay firmly rooted in the European Union, even if it means greater sacrifices.
Either way, something needs to change fast.
Greece is on the brink of going bust, and the economy is gradually grinding to a halt. Its credit lines with the IMF and Europe have collapsed.
Banks have been shut for a week, and ATM withdrawals are limited to 60 euros a day. In practice, a shortage of 20 euro notes means some people are only able to get their hands on 50 euros.
The banks won’t be able to reopen on Tuesday as scheduled unless the ECB resumes emergency lending — and that appears unthinkable without an unequivocal commitment from the Greek government to reform.
Some essential services are starting to feel the pinch, too.
Dr. Theo Giannaros, head of the Elpis hospital in Athens, told CNN that supplies of medicines and basic foodstuffs were running low.
The prospect of a failing state in southeastern Europe alarms policymakers from Brussels to Washington. Greece is a member of NATO, but has been flirting with Russia. And it is the gateway to Europe for many migrants fleeing war, terror and poverty in the Middle East and Africa.
— Isa Soares and Zahra Ullah in Athens contributed to this article.