Stunned Greeks faced shuttered banks, long supermarkets lines and overwhelming uncertainty on Monday as a breakdown in talks between Athens and its international creditors plunged the country deep into crisis.
With Greece’s bailout expiring on Tuesday and an IMF payment falling due at the same time, Prime Minister Alexis Tsipras pleaded by phone with European officials to extend the programme until a referendum on Sunday on its future terms.
The frantic efforts to secure Greece’s place within the Eurozone followed a dramatic weekend. Tsipras’ decision, early on Saturday, to put the aid package to a popular vote took the lenders and some of his own negotiating team by surprise.
It also pushed Greece towards defaulting on €1.6 billion due to the International Monetary Fund on Tuesday.
Long queues
Greeks — used to lengthy talks with creditors before an eleventh-hour deal — were left shocked by the turn of events. Lines snaked outside ATMs and inside supermarkets while fears of disruptions to petrol and medicine supplies grew.
After months of talks, Greece’s exasperated European partners have put the blame for the crisis squarely on Tsipras for rejecting a package they consider generous. The Greek side says further austerity would simply deepen one of the worst economic crises of modern times in a country where a quarter of the workforce is already unemployed.
The Greek government will keep banks shut at least until after July 5, the date of the referendum, and withdrawals from automated teller machines were limited to €60 a day when they reopened at midday. The stock exchange will also stay shut.
The creditors wanted Greece to cut pensions and raise taxes in ways that Tsipras has long argued would be counter-productive.
Despite the financial shock, parts of daily life went on as normal, with shops, pharmacies and supermarkets in the city opening and Greeks meeting to discuss their country’s fate at cafes and restaurants. Tourists gathered as usual to watch the changing of the presidential guard outside Parliament.
Tsipras’s Syriza party has called for a rally to protest against austerity measures and urge voters to say ‘No’ in the referendum.
The Economist Intelligence Unit predicted a ‘No’ vote was more likely, raising the odds of a Grexit to 60 per cent. — Reuters
