Long lines in Greece as banks reopen; new proposal weighed

Greece will stay in the euro.

One of its politicians, Constantin Damavolitis, was expelled from the coalition benches for calling for a “Yes” vote.

Greece is seeking a third bailout from the eurozone rescue fund after the previous deal expired this week without agreement on the terms of final pay outs. If it finds itself in arrears to the world’s financial backstop, Greece would immediately lose access to IMF resources and could eventually be kicked out of the fund entirely.

European leaders contend that a Greek vote against the lenders’ plan would amount to Athens withdrawing from the 19-nation euro currency bloc, but Tsipras rejected that argument.

Fitch said it now considered a default on privately-held debt “probable”. That’s to stop people from withdrawing all their cash, which the banks couldn’t possibly honor.

Writing on his personal website on Wednesday, Greek Finance Minister Yanis Varoufakis said that “with the power vested upon us by that NO [vote]”, the government could “renegotiate Greece’s public debt as well as the distribution of burdens between the haves and the have nots”.

But those hopes were quickly dashed.

Tsipras asked in aletter to creditors to keep a discount on value added tax for Greek islands, stretch out defence spending cuts and delay the phasing out of an income supplement to poorer pensioners.

“Before the planned referendum is carried out, we will not negotiate over anything new”, the dpa news agency quoted Merkel as saying.

European finance ministers were meeting Wednesday to discuss the Greek government’s new stance.

Dragasakis said the new letter “narrows the differences further”. The Greek government says that argument is merely an attempt to terrorise the people into voting in favor of destructive austerity policies.

(AP Photo/Giannis Papanikos). Demonstrators shout slogans during a rally by supporters of the “No” vote to the upcoming referendum in the northern Greek port city of Thessaloniki, Wednesday, July 1, 2015. “Europe!”

Alexis Tsipras told creditors Athens could accept their bailout offer if conditions were changed.

With Tsipras stepping up the No campaign in a televised address, there are signs the vote is too close to call.

Tsipras has gambled throughout that Europe’s other governments would do anything to keep Greece in the euro system.

– Tsipras has indicated he is now ready to accept the terms he rejected late last week, with some exceptions. The referendum is due to take place on Sunday.

Commission spokesman Margaritis Schinas said the offer would also involve unspecified discussions on Athens’s massive debt load of over 300 billion euros, or around 180 percent of GDP.

CHANCELLOR ANGELA MERKEL, Germany (through interpreter): Holding a referendum is a democratic sovereign right of the Greek state.

If Tsipras’s government obtains its “No” vote, it would send the eurozone “into the unknown”, French President Francois Hollande said on an African visit. Extending the bailout would allow Greece to make its payment to the International Monetary Fund. Capital controls imposed this week ahead of the default complicate the economic health check but officials see no difficulty in producing a quick review of Greece’s needs. They spoke on condition of anonymity because talks about the program were still ongoing.

The elderly have been hit particularly hard, with tens of thousands of pensions unpaid as of Tuesday afternoon.

Long lines at cash machines this week provided a stark visual symbol of the pressure on Tsipras, who came to power in January vowing to end austerity and protect the poor.

It also means the country is without an worldwide financial lifeline for the first time since 2010 – bringing more uncertainty for the Greek people who are already faced with closed banks and a €60 cap on daily cash withdrawals.