The referendum has thrown additional confusion into the already fraught negotiations. “It’s up to the Greeks to respond”.
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However, up to 1,000 branches re-opened on Wednesday to allow pensioners – many of whom do not use bank cards – a one-off weekly withdrawal of up to €120.
The move increased fears the country could soon fall out of the euro and saw Greeks rushing to pull money out of ATMs, leading the government to shutter its banks and restrict banking transactions.
Support for the “no” vote had been much higher, at 57 per cent, among those polled by ProRata on Sunday, before the imposition of capital controls.
Experts have said that, for a deal to be wrapped up by Tuesday, reforms need to be submitted to Greek parliament by Sunday morning at the latest. Greece continues to be one of them despite the fact that it has not paid its dues to the worldwide community but it is a member.
The Washington-based fund said the Greek government failed to transfer €1.55 billion ($1.73 billion) by close-of-business on Tuesday-the largest, single missed repayment in the IMF’s history.
It’s unclear how a “No” vote would help Greece’s negotiating standpoint, but Varoufakis said since the referendum was announced his European counterparts had “sent signals that they are ready to discuss debt restructuring”, which they have been reluctant to do in the past but which Syriza believes is vital for the long-term health of Greece’s economy.
“We do not have a choice as to who represents a country”, Lagarde said when asked about the trustworthiness of the Greeks. “I’m in total agreement with (banks) closing”.
There is a growing feeling in Europe, however, that its prime minister, Alexis Tsipras, and its unconventional finance minister, Yanis Varoufakis, have overplayed their hand. Tsipras has implied he could do the same.
The S&P continued, in a note, to say that Greece’s GDP would shrink by 20 percent in a four-year period if Greece were to leave the eurozone.
If Greece votes “no” it would nearly certainly lead to its exit from the eurozone, the so-called “Grexit” scenario. “It is a disgrace that we have these scenes of shame because they closed the banks precisely because we wanted to give the people the vote”.
However the head of the Eurogroup of eurozone finance ministers, Dutch Finance Minister Jeroen Dijsselbloem, made clear there were “no grounds for further talks at this point” because of the Greek government’s refusal to call off the referendum. “An accord is for right now, it will not be put off”, he said.
But it is unlikely the Prime Minister will be able to govern if Greece does not reach a deal, in any case.
But talks broke down over the terms of the agreement.
He told Bloomberg TV “I prefer to cut my arm off” than sign a rescue deal that does not include a debt relief provision.
Last weekend, Tsipras abandoned the negotiation table and called for a referendum on July 5 on the terms of the bailout extension. He said the question put to the people was “not very clear” and said the Council of Europe, which monitors votes, had not been invited to do so.
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By Wednesday afternoon, Greece was completely isolated and sinking deeper into a financial and economic hole. Moody’s slashed the country’s rating from Caa2 to Caa3, or just above default.
