Greek debt crisis: referendum to go ahead as court rejects appeal

Greece’s top court has overruled an appeal from two Greek citizens against the decision to hold a referendum on Greece’s latest bailout package, clearing the vote to go ahead on Sunday.

Tens of thousands of people have gathered in Athens for two rallies, held by the yes and no camps. Greek prime minister Alexis Tsipras addressed the latter, urging his supporters to express a “proud no to ultimatums and those who terrorise you”. He then tweeted that Greece will be sending a “message of democracy and dignity to Europe and the world”. Rallies showing solidarity with Greece’s anti-austerity movement are also being held in other European countries, including several German cities and Rome.

Earlier on Friday, Tsipras said Thursday’s IMF report, which called for debt relief and a 20-year grace period, vindicated the Greek government. According to reports, the US pushed for the report to be published, against European resistance.

European council president Donald Tusk has sought to calm the waters between Greece and its creditors by saying that Sunday’s referendum in Greece is not a vote on euro membership.

It emerged that Greek banks have a buffer of €1bn – enough cash to last them until Monday, when the European Central Bank will decide whether to increase loans to Greek banks.

The latest polling, just two days before the vote, puts the two camps almost neck and neck - “too close to call”, according to Ipsos.

An Ipsos poll just released shows the referendum on a knife-edge. It has yes on 44% and no one point behind on 43%, with 12% still undecided.

The number of undecided respondents underscores the significant potential for volatility, Ipsos said, describing the referendum as “too close to call”.

The poll is the fifth to be released on Friday, with the fourth also giving a narrow lead to the yes camp.

It also shows that, regardless of where they place their own support, more Greeks believe that the yes side will win than think victory will be handed to the no camp.

There are suggestions that the US pushed for the IMF report to be published this week, overcoming opposition from Europe. Here’s the Reuters exclusive:

Eurozone countries tried in vain to stop the IMF publishing a gloomy analysis of Greece’s debt burden which the leftist government says vindicates its call to voters to reject bailout terms, sources familiar with the situation said on Friday.

The document released in Washington on Thursday said Greece’s public finances will not be sustainable without substantial debt relief, possibly including write-offs by European partners of loans guaranteed by taxpayers. It also said Greece will need at least €50bn in additional aid over the next three years to keep itself afloat.

Publication of the draft Debt Sustainability Analysis laid bare a dispute between Brussels and the Washington-based global lender that has been simmering behind closed doors for months.

Greek Prime Minister Alexis Tsipras cited the report in a televised appeal to voters on Friday to say ‘No’ to the proposed austerity terms, which have anyway expired since talks broke down and Athens defaulted on an IMF loan this week.

It was not clear whether an arcane IMF document would influence a cliffhanger poll in which Greece’s future in the euro zone is at stake with banks closed, cash withdrawals rationed and commerce seizing up.

“Yesterday an event of major political importance happened,” Tsipras said. “The IMF published a report on Greece’s economy which is a great vindication for the Greek government as it confirms the obvious - that Greek debt is not sustainable.”

At a meeting on the International Monetary Fund’s board on Wednesday, European members questioned the timing of the report which IMF management proposed at short notice releasing three days before Sunday’s crucial referendum that may determine the country’s future in the euro zone, the sources said.

There was no vote but the Europeans were heavily outnumbered and the United States, the strongest voice in the IMF, was in favor of publication, the sources said.

The Europeans were also concerned that the report could distract attention from a view they share with the IMF that the Tsipras government, in the five months since it was elected, has wrecked a fragile economy that was just starting to recover.

“It wasn’t an easy decision,” an IMF source involved in the debate over publication said. “We are not living in an ivory tower here. But the EU has to understand that not everything can be decided based on their own imperatives.”

The board had considered all arguments, including the risk that the document would be politicized, but the prevailing view was that all the evidence and figures should be laid out transparently before the referendum.

“Facts are stubborn. You can’t hide the facts because they may be exploited,” the IMF source said.

IMF spokeswoman Angela Gaviria declined to comment on this report.

Helena Smith says:

The mayor of Athens George Kaminis has addressed the yes rally. He has delivered a withering critique of the government accusing it of lies and obsfucation. “They say they will reach a deal in 48 hours when no one is talking to them,” he has just told the crowd.

Over at the no rally, prime minister Alexis Tsipras addressed ecstatic supporters. He kicked off his speech saying:

“Today we are not protesting, today we are celebrating democracy, today we are celebrating the victory of democracy, whatever the result is on Monday. Today all of Europe has its eyes on you, the Greek people and on the three million impoverished Greeks. The whole planet has its eyes turned on Syntagma square in the place where democracy was born.”

The leftist firebrand then turned his fire on creditors.

“No one has the right to threaten to divide Europe,” he told the crowd. “We will tell them noon Sunday.”

Tellingly the prime minister’s speech was not relayed in its entirety by television channels. The media has not been shy about showing its political colours: they have avidly thrown their weight behind the yes vote.

He urged voters to express a “proud ‘No’ to ultimatums and those who terrorise you.”

That ends his short speech - and the concert restarts.

The Greek prime minister has told supporters that whatever happens over the weekend, this is a celebration of democracy. He said Greeks are determined to take matters into their own hands.

Sunday’s referendum is about staying in Europe, and deciding to live with dignity in Europe, he said.

Tsipras, dressed in a white shirt, has just walked up on stage and is waving to the crowd.

3 Jul 201514.37 EDT

Helena Smith

Helena Smith in Athens writes:

Sunday’s referendum has, almost overnight, turned into a fight for political survival for Syriza. The anti-austerity movement that took Europe by storm, when it was swept into power on the back of popular discontent in January, now faces an existential battle. “In Europe they want to squelch us because they only want one policy, the doctrine of neo-liberalism, to succeed,” the administrative reform minister Giorgos Katrougalos said earlier today.

There is growing acceptance that prime minister Alexis Tsipras’ high-stakes gamble calling the referendum may well backfire. The “yes” vote has swelled in recent days as big name political and cultural figures have come out in support. If the outcome on Sunday is a massive turnout in support for the “yes” vote, it will augur political developments with Tsipras and his radical left Syriza party possibly even having to step down on Monday. If the vote is “no,” as the government has urged, Athens’ relationship will break down further. “They have made it clear Schauble, Merkel, and others that they don’t want to deal with us,” one minister told me requesting anonymity. “It is very difficult to say if we will be here on Monday. A lot is in Tsipras’ hands. Our biggest concern, now, is the division we are seeing [between the two camps] and how we are going to handle it.”

Speculation was rampant on Friday that in the event of a resounding ‘yes’ a national unity government might have to be formed after the referendum possibly led by technocrats or figures outside the political arena. Athens’ mayor George Kaminis, a professor of constitutional law and Yannis Boutaris, the mayor of Thessakoniki, are possibilities.

“It is very difficult to see a better agreement [emerging with creditors] in the event of a ‘no’ vote,” said the political commentator Alexis Papahelas. “A ‘yes’ vote is going to be difficult and the Europeans have made a lot of mistakes but it will at least keep us at the core of Europe.”

The ‘No’ rally has turned into a music festival, punctuated by cries of ‘Ochi’. Everyone is singing along now.