Greece looked set Sunday to enter an even more volatile phase of its financial crisis as official projections forecast a resounding win for the “no” campaign in a referendum that could decide the country’s financial fate in the short term and its role in Europe in the long term.. The vote, on a proposed bailout deal from Athens’ international lenders, was a strong rebuke to European Union leaders who had warned that the plebiscite was, in effect, a vote on whether Greece wanted to keep on using the euro as its currency.
With 57% of precincts reporting at 10:15 p.m. local time (12:15 p.m. PDT), the “no” camp was ahead by 61% to 39%, according to the Greek Ministry of Interior.
As the scale of the “no” victory becomes clear, the question immediately shifts to whether, and how quickly, Greece’s European partners are prepared to resume negotiations with Athens. Relations between the two sides have deteriorated badly over the last few weeks, especially after Greek Prime Minister Alexis Tsipras broke off talks at the end of June and called Sunday’s snap poll on bailout proposals that have technically since expired.
Perhaps even more pressing will be the reaction of the European Central Bank, which has been propping up the Greek banking system for months with emergency funding. If the ECB decides at a meeting Monday to end that support, Greece’s banks will quickly run out of cash, business will grind to a halt and basic supplies could start to dwindle on store shelves.
The Greek government is also nearly out of cash. If it cannot pay its debts – a major repayment is due July 20 – Athens could be forced to introduce a parallel currency and eventually leave the Eurozone. However, analysts said this was not an immediate threat.
The leaders of Germany and France are to meet in Paris on Monday evening to discuss the crisis. Both had warned Greeks before the referendum that the poll was, in effect, a vote on whether Greece wanted to remain in the Eurozone.
The size of the projected victory for the “no” campaign came as something of a surprise after a flurry of opinion polls showed an almost dead heat. A number of voters were undecided, however, and could have made the difference.
Surveys showed that young people voted “no” in droves. Many said they agreed with Tsipras’ contention that the bailout proposals from Greece’s lenders imposed too much austerity after five years of already heavy spending cuts. The Greek economy has contracted by a breathtaking 25% since Athens began accepting emergency aid and implementing austerity measures since 2010.
“These measures would worsen the situation,” said teacher Paula Andriotaki, 33.
But Eurozone leaders have scoffed at that idea and said that a new agreement could be even more difficult now that Greece's financial situation has worsened further.
“Yes” supporters urged Greeks to join them in order to guarantee Greece’s continued place among the 19 nations that use the euro. They said that membership in the wider European Union could also be at risk and that Greece cannot afford to be isolated.
The ballot itself was the subject of some criticism, because the question it asks is wordy and couched in jargon.
Moreover, the bailout deal it referred to was already technically moot. The offer from Greece’s creditors expired Tuesday night, after talks between them and Athens collapsed last week over Tsipras’ surprise decision to call the referendum. Creditors say that negotiations on a new agreement would have to start from scratch.
Because of the convoluted ballot question, and the competing claims of whether the real issue at stake is the future of Greece as a member of the Eurozone, many Greeks complained of confusion over just what was being asked of them.
Maria Liapi, who helped campaign for the “no” side, said she wanted to reject a bailout agreement that would bring more hardship to Greece, whose economy has already contracted by more than 25% since the country first began accepting rescue loans in 2010 and implementing harsh austerity cuts in return.
But Loukia Mitsi, 40, an unemployed teacher and mother of three, said she would vote “yes” because Greece needed to stick with the euro and not be forced to revert to its old currency, the drachma.
“My life got better with the euro,” Mitsi said. “I want a European solution that is good for Greece. I want a better future, and we won’t have that if we go to the drachma.”
About 10 million voters were eligible to cast ballots in Sunday's referendum, Greece’s first in 41 years. In 1974, the people were asked to decide whether their country should retain the monarchy; the answer then was also no.
Special correspondent Pavlos Zafiropoulos contributed to this report.
