by Lady Michelle Jennifer Santos
5 July 2015, ATHENS (TSR) – Greece defies the Eurogroup on Sunday with an overwhelming NO, providing Prime minister Alexis Tsipras a clear mandate to reject the terms of the bailout, according to Greek media reports.
The referendum was organised within a week, a period well below the 20 days most elections take to be organised.
The official Greek referendum ballot was brought to light on Monday, June 29. The referendum only required Greek citizens to answer “Yes” or “No” to the government’s question of whether the country should accept the creditors’ reforms proposal.
The question on the ballot reads: “Should the draft agreement, tabled by the European Commission, the European Central Bank and the International Monetary Fund to the Eurogroup of June 25, 2015, consisting of two parts, be accepted? The first document is titled “Reforms for the completion of the Current Program and Beyond” and the second “Preliminary Debt sustainability analysis.”
The Greek parliament’s ratification of the referendum last Saturday evening triggered a series of events that made up for a very long week in Greece.
The EU has issued on Saturday the European Financial Stability Facility statement “reserving its rights to act upon Greece’s default” to add more pressure one day before Greeks vote in a referendum to accept or reject a bailout deal.
On Sunday, the European Central Bank decided to not increase the European Liquidity Assistance to Greek banks and in response the government imposed capital controls and withdrawal restrictions on the same evening.
On Tuesday Prime Minister Tsipras requested a two year deal with the ESM which led to urgent Eurogroup meetings on the same and the next day. The outcome of the meetings was to postpone any further talks on the Greek request until after the referendum.
The polls closed at 7pm (local Athens time) and the first assessment of the results was made public at around 9pm, provided that the results from 10% of polling stations from across the country have been collected and the difference is over 4%, to compensate for statistical error.
The final figures were as follows: With 40.17% of the vote counted 61.01% voted ‘no’ and 38.99% have voted ‘no’, according to The Ministry of Interior and Administrative Reconstruction.
The implications of the vote are unclear at this moment.
The critical referendum is a very significant victory for the Greek government, which was campaigning in favour of the NO vote arguing that it will strengthen Greece’s negotiating power in its attempt to strike a better deal with its international creditors than the one previously offered.
On the other hand, European Commission President Jean Claude Juncker said on Friday that a NO vote would “dramatically weaken” the Greek negotiating position.
“This mandate was given under very difficult circumstances and this only adds to its importance. It gives the government instructions to defend its own proposal and its own positions, so the negotiations will not start from scratch. Now, we need to start a substantive negotiation on a more solid foundation,” said Greek government spokesman Gavriil Sakellaridis who expressed his satisfaction.
The “No” vote was constantly gaining ground over the last 24 hours, and the rally in Syntagma Square on Friday, July 3, “one of the largest seen to this day”, was indicative of this fact, he added.
Finally, he stated that after Friday’s rally the messages coming from abroad had changed. “We need to ensure that the people who voted today remain united, regardless of their vote. We need to show national unity,” he concluded.
Antonis Samaras Resigns from ‘ND’ Party Leadership
Former Greek Prime Minister Antonis Samaras resigned from the leadership of its party after a landslide win of the NO vote his party strongly opposed in the Greek referendum.
The centre-right wing New Democracy party faced a leadership crisis after an overwhelming NO result in Sunday’s referendum.
New Democracy and its former leader Antonis Samaras campaigned strongly in favor of a YES vote to a take-it-or-leave-it bailout proposal offered to Greece by its creditors, losing by a landslide on Sunday’s Greek referendum.
Antonis Samaras was Greece’s prime minister from June 2012 to January 2012, and will be known as leader who under the Greece’s creditors pressure followed austerity measured that crippled the Greek average citizen.
According to New Democracy sources, longtime New Democracy party member Dora Mpakogianni, who also served as Minister of Foreign Affairs from 2006 to 2009, contacted Samaras on Saturday urging him to step down from the position to help prevent a NO victory.
Nikos Dendias, a New Democracy party member and former Minister of Public Order and Citizen Protection, made a series of tweets after Sunday’s first estimations slamming Samaras’ choices.
“The responsibility for the results is not the same for all of us” one tweet read while Dendias later tweeted “Let us protect the political heritage of Konstantinos Karamanlis in the morning” and “Today is not the right moment to discuss what we will do at New Democracy. We will look at that tomorrow.”
Furthermore, Sakis Ioannidis, the President of the Ogranization of the New Democracy Youth, posted a message on his Facebook wall in which he notes that Greece will go through tough times and calls for unity among Greeks.
“Only one thing is certain, that the old political regime, as it had been structured, is being erased” the post read.
Evangelos Meimarakis, has been appointed interim leader of ‘New Democracy,’ until the party convened to elect its new leader.
Referendum Went Smoothly
Overall, the voting process went smoothly without any problems reported. Only minor problems reported in a few polling stations in Athens, mostly due to a shortage of envelopes, however the situation was addressed by midday. In Ikaria two polling stations were late to open after the judicial representatives were lost on their way. Earlier, State Minister Nikos Pappas disputed reports that a depositor haircut was being planned. Mr. Pappas stressed that the government is working towards normalizing the operation of the banks.
The Minister of Interior Nikos Voutsis made an official announcement at 8pm, expressing his satisfaction with the referendum procedure. Mr. Voutsis praised the relevant ministerial services and the police for ensuring that there were no problems.
During the day, the President of the European Commission Jean-Claude Juncker commented that he welcomed the referendum results in Greece and will attempt to contact Greek official later on Sunday evening.
The Social Democratic Party of Germany (SDP) as requested a summit, with the party’s Parliamentary Group VP of the Axel Schäfer commenting that the situation is too serious to be managed by Finance Ministers alone. A Euroworking Group teleconference has been arranged for Monday.The Alternate Minister of International Economic Relations Euclid Tsakalotos told Star Channel that the government will negotiate an agreement that is financially sustainable. When asked how such an agreement will be reached within 48 hours when it has not been possible after 5 months of talks, he explained that there were two new things to take into consideration; firstly that the government has a fresh mandate and secondly that the IMF report indicates that the Greek public debt is not sustainable.The International Monetary Fund has issued a preliminary draft debt sustainability analysis (DSA) of the Greek public debt which vindicates the country’s request for restructure according to the spokesperson of the government.
According to media reports, Dora Bakoyanni has asked that Antonis Samaras resigns from the Presidency of New Democracy. Mrs. Bakoyanni is said to have told him to resign and if need be, she will also “back down”.
Reuters has reported that the Eurozone officials are not planning any emergency meeting of Finance Ministers on Monday, as they do not know what to discuss, according to an unnamed official.
PASOK President Fofi Gennimata stated that the “people’s verdict is respected. The people wish to remain in Europe and want an agreement”, adding that the “the country must overcome the impasse, which is the government’s responsibility”. Mrs. Gennimata underlined that her party fought with the Greek people’s interest in mind and called the PM to carry out his promise for deal within 48 hours, as time is running out for Greece.
The Belgian Minister of Finances Johan Van Overtveldt commented that the outcome of the referendum will make the situation difficult, but added that the negotiations will continue. Mr. Van Overtveldt, who is one of the first Finance Ministers to comment on the referendum results, told the VRT network that the talks will focus on measures to put the Greek economy back on track and give the Greek people prospects for the future.
The Italian Minister of Foreign Affairs Paolo Gentiloni stated that the outcome of the referendum in Greece shows that the austerity measures requested by Europe have been rejected and as such, it is time to focus on an agreement with Greek authorities. He added that there is no way out of the Greek labyrinth with a weak Europe that does not develop.
The leader of Spain’s Podemos party, Pablo Iglesias, commented on his Twitter account that “democracy won in Greece”, in response to the outcome of the referendum.
The German Vice Chancellor Sigmar Gabriel told Tagesspiegel that the Greek Prime Minister Alexis Tsipras has burned his final bridges, while the chief of the German savings bank union (DSGV) told Reuters Greece has violated Eurozone regulations and such must be expelled immediately from the single currency.
Russia’s Deputy Minister of Economic Development Alexey Likhachev commented on the referendum result and that Greece took one step closer to leaving the Eurozone. Mr. Likhachev added that the Greek people rejected the creditor proposals for further austerity.
The Prime Minister of Estonia Taavi Roivas commented that the referendum result did not look good for the future of Greece, while the Latvian Minister of Foreign Affairs Edgar Rinkevics stressed that the referendum results will have consequences for everyone.
The Slovak Minister of Finances Peter Kazimir expressed his ‘disappointment’ in the outcome of the referendum in Greece and explained that we must remain united in addressing this situation, as soon as possible. The German MEP Alexander Lambsdorffcalled Chancellor Merkel and the other European partners to initiate a Grexit.
“The ultimatum has been returned to to the creditors,” noted Greece’s Finance Minister Yanis Varoufakis.
“Today’s no is a big yes to a democratic Europe,” said a smiling Varoufakis who said that tonight Greece put an end to 5 years of bad medicine.
Varoufakis said that creditors wrongly believed that the bankruptcy of the Greek state could be averted with new loans the poor would have to pay.
“We said no to new loans unless we have restructured our old ones,” however Varoufakis said that he fully supports real reforms that kill corruption.
The end of austerity and the restructure of Greece’s debt was always a discussion creditors did not want to have, but now they will have to negotiate based on the NO vote win, he said.
Even under the fear that was spread through the “mass media of oligarchy” and with Greek banks closed in absence of ECB liquidity, Varoufakis noted that the vast majority of Greeks still said a big NO to the creditors previous proposal.
“We are ready to sit on the negotiations table and we are looking forward to hold discussions with the ECB who kept a neutral position, the IMF that agrees with our position of debt restructuring and the European Commission that could play a positive role for Greece, he added.
The Eurogroup Working Group will convene tomorrow, following the outcome of the Greek referendum say sources in Brussels, according to the AFP.
Proceeding this meeting, there will be a Eurogroup phone conference with the nineteen Eurozone finance ministers also discussing Sunday’s results.
Tomorrow’s meetings are likely to shed light on Greece’s as well as the Eurozone’s future.