Greek Voters Overwhelmingly Reject Creditors’ Austerity Demand

The stark warning followed what were described as serious and candid talks Tuesday in Brussels between Greek Prime Minister Alexis Tsipras and other European leaders, including German Chancellor Angela Merkel.

Eurozone leaders have given Greece until Thursday to present a comprehensive reform package to the Eurogroup finance ministers.

That is less likely today because most of Greek debt is held by the European Central Bank and the global Monetary Fund rather than by individual European banks, as in the 2011 bailouts. “I’m against a Grexit but we must discuss what “respecting the Greek vote” means”, said Juncker in a speech Tuesday morning.

But his bolstered mandate to push for better concessions from creditors hit the hard reality of the country’s deteriorating finances, with banks facing the risk of collapse within days unless a rescue deal is reached.

Austerity has not worked in Greece – indeed, in many ways it has made the situation worse, with the economy shrinking by a quarter in the past five years, and the referendum is a vote of confidence in Mr Tsipras’s attempts to find an alternative.

Greek banks are running out of cash even after the government shut them last week and placed limits on how much depositors can withdraw or transfer.

The vote Sunday in Greece against accepting the terms of worldwide donors for a bailout of its sinking economy puts the country and the other 18 members of the eurozone up against a wall in terms of what happens next. The United States has said it wants an early solution to Greece’s debt crisis that keeps Athens in the European currency area.

Tsipras scored a bigger than expected win in Sunday’s bailout referendum, with 61 percent of voters rejecting the economic measures creditors had proposed in exchange for loans Greece needs to remain afloat, including further cuts to pensions. One thing is sure: European leaders must recognize this is a critical moment in the eurozone’s history.

– Russian President Vladimir Putin tells Tsipras he supports Greeks in overcoming their “difficulties” and hopes Greece will “reach the necessary compromise with creditors as soon as possible”. But Greeks are holding on tight to what they have.

Greece’s new Finance Minister Euclid Tsakalotos is due to make his first appearance at Tuesday’s Eurogroup meeting, a day after his outspoken motorbike-riding predecessor Yanis Varoufakis stepped down amid a rift with Athens’s creditors.

“I won’t hide from you that I am very nervous and very anxious”, Tsakalotos said after being sworn in Monday.

He said in a statement released by the Finance Ministry that it is crucial there is a “proper resolution” involving debt restructuring immediately.

Unable to pay his suppliers outside of Greece or access the more than $100,000 in his bank account, Manesiotis fears he may lose his business. On July 20 it faces a huge payment of more than three billion euros to the European Central Bank.

Investors were cautious on Tuesday, with stock markets down and the euro 0.7 per cent lower.