30th June 2015
Thousands of Greeks are marching in support of a “no” vote on austerity measures and the Prime Minister Alexis Tsipras has threatened to resign if Sunday’s referendum result is in favour of further spending cuts.
Mr Tsipras says a vote against austerity would help Greece negotiate a better agreement with creditors over its debt crisis, but he will not stay in the role to administer more cuts.
EU leaders have warned that the country would effectively be voting for Greece to leave the eurozone if they vote to reject austerity measures.
On Tuesday, Greece’s bailout expires and it is due to repay a €1.6bn (£1.1bn) loan to the International Monetary Fund (IMF). Some reports suggest that creditors have made a last minute offer to Greece, according to the BBC.
Greek banks have been shut this week because of the crisis and people have only been allowed to withdraw €60 each per day.
On Monday evening, Mr Tsipras appealed to viewers on state TV to reject the creditors’ proposals, saying it would give Greece “more powerful weapons” in the negotiations.
“We ask you to reject it with all the might of your soul, with the greatest margin possible,” he said.
But he said he did not believe that creditors wanted to push Greece out of the eurozone because the cost would be “immense”.
He added: “If the Greek people want to proceed with austerity plans in perpetuity, which will leave us unable to lift our head… we will respect it, but we will not be the ones to carry it out,” he said.
On Tuesday, Greece’s finance ministry said 1,000 bank branches would re-open from Wednesday to allow pensioners who do not have bank cards to access their money.
The Greek stocks exchange has also been closed and public transport in the capital is free for a week while the banks remain closed.
The referendum question to Greeks on Sunday is quite complex. It reads:
“Should the agreement plan submitted by the European Commission, European Central Bank and the International Monetary Fund to the June 25 eurogroup and consisting of two parts, which form their single proposal, be accepted? The first document is titled ‘Reforms for the completion of the Current Program and Beyond’ and the second ‘Preliminary Debt Sustainability Analysis’.
Chris Williams, chief executive of Wealth Horizon, says: “The markets will be jittery at first, but we should not overplay what impact a Grexit will have on the UK investment markets. Far from a tidal wave of economic destruction, as some doomsday economists have predicted, the prospect of a Greek exit from the Euro has been on the cards for a number of years and most European nations have been prepared and waiting for this possible eventuality.
“Indeed, investors and investment managers have also heeded the same warnings. The protracted role out of the Greek economic crisis has meant that only a small minority of investors are likely to be holding bonds or shares in the country.
“Nobody quite knows what will happen over the coming months, but calm heads and well-balanced portfolios will be the order of the day. The lack of exposure to the Greek crisis of anyone outside of the official creditors will mean that, in the long-run, the global markets should be able to overcome whatever lies ahead.”