Early Returns Show Greeks Voting Down Austerity Referendum

Early Returns Show Greeks Voting Down Austerity Referendum

The socialist Syriza government of Greece is projecting that austerity referendum is being soundly rejected by the Greek people.
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Early returns in the historic referendum showed the No side -Oxi in Greek =- running at 61pc versus 39pc for the Yes side as the Greek people turned out en masse to vent their anger over six years of economic depression and national humiliation. A volcanic revolt appeared to have swept through Greek islands.

Anger is great and all, but just a reminder to the Greek people – anger won’t pay the bills.


Prime Minister Alexis Tsipras insisted that a “no” vote on the referendum would give Greece an advantage in negotiating a new bailout deal, a sentiment echoed by his left-wing government.

Minister of State Nikos Papas, speaking on Alpha television, said it would be “wrong to link a ‘no’ result to an exit from the eurozone. If a ‘no’ prevails that will help us get a better agreement.”

Tsipras’ high-stakes brinkmanship with lenders from the eurozone countries and the International Monetary Fund resulted in Greece defaulting on its debts this week and shutting down its banks to avoid their collapse. He called the referendum last weekend, giving both sides just a week to campaign.

“Today, democracy is defeating fear … I am very optimistic,” Tsipras said earlier in the day after voting in in Athens.

And now the European Union has to decide what to do with Greece.

European officials had openly urged Greeks to vote against the government’s recommendation. The leaders of Germany and France called for a European Union summit Tuesday to discuss the situation.

“I hope people say ‘yes,'” European Parliament President Martin Schulz told German public radio. “If after the referendum, the majority is a ‘no,’ they will have to introduce another currency because the euro will no longer be available for a means of payment.”

Belgian Finance Minister Johan Van Overtveldt was one of the first eurozone ministers to react to the initial results.

“This likely ‘no’ complicates matters,” he told Belgium’s VRT network, but insisted the door remained open to resume talks with the Greek government within hours.

There are a lot of variables in play, obviously, but if the EU shuts the door on further talks without any show of good faith on Greece’s part (and a “no” vote on austerity is definitely not a show of good faith, as Greece is demanding to basically become the welfare state/charity case of the EU), then Greece will effectively become a “cashless” country. The socialist government is looking for some way to find more of other people’s money to spend, and their proposals start with IOUs, freezing or seizing assets already in the banking system, and then possibly moving to print euros themselves, instead of bringing in a extremely devalued drachma.

Top Syriza officials say they are considering drastic steps to boost liquidity and shore up the banking system, should the ECB refuse to give the country enough breathing room for a fresh talks.

“If necessary, we will issue parallel liquidity and California-style IOU’s, in an electronic form. We should have done it a week ago,” said Yanis Varoufakis, the finance minister.

Syriza sources say the Greek ministry of finance is examining options to take direct control of the banking system if need be rather than accept a draconian seizure of depositor savings – reportedly a ‘bail-in’ above a threshhold of €8,000 – and to prevent any banks being shut down on the orders of the ECB.

Government officials recognize that this would lead to an unprecedented rift with the EU authorities. But Syriza’s attitude at this stage is that their only defence against a hegemonic power is to fight guerrilla warfare.

Be prepared for international markets to react strongly and badly to this vote tomorrow. This is going to be an extremely ugly and bumpy ride for all of us. On the up side…


If any of us can afford it.

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3 Comments
  • Kate says:

    Yeah. Greek voters are saying they haven’t run out of other people’s money even though other people disagree.

  • Kate says:

    BTW, markets panic in 3…2…1.

    • Wfjag says:

      The markets won’t panic since everyone with money in Greece has had months to get it out. The Greek banks will seize deposits over $30K Euros next week, and they and the Greek gov’t will run out of cash the week after that. Food riots should start the week after that. This will serve as a warning to other EuroZone gov’ts that think there is no consequence to run away spending – e.g., Ireland, Spain and Portugal – that Germany won’t support them indefinitely.

      Maybe Hillary and Bernie will notice, but I doubt it.

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