A one-page letter from Greek Finance Minister Yanis Varoufakis to the chairman of the Eurogroup of finance ministers of the euro zone said Greece was “fully committed to service its external debt in a manner that secures the viability of the Greek economy, growth and social cohesion”.
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The developments prompted Moody’s to cut its credit rating for Greece to a deep-junk “Caa3”, warning it was now less likely that official creditors will support the country, whatever happens in Sunday’s referendum.
Frustrated eurozone finance ministers agreed Wednesday to wait until after the referendum before holding any more talks, saying there were “no grounds” for further discussions.
On Wednesday, the European Central Bank’s governing council will meet to discuss the crisis in Greece.
Greek Prime Minister Alexis Tsipras says his government is willing to accept an offer from creditors, but with several modifications, including maintaining a tax break for islands and delaying some pension reform by a few months.
Greece’s fear is that the ECB will turn up the pressure by tightening the requirements on any collateral the Greek banks use in exchange for emergency loans. Daily withdrawals are limited to 60 euros, or about $67. “Everything is developing”, Health Minister Panagiotis Kouroumplis said when asked during a morning news show on Antenna television whether the referendum could be called off under certain circumstances.
The battle for Greek votes was in full swing Thursday ahead of a crucial weekend referendum that could decide whether the country falls out of the euro.
It came as Greece’s second bailout expired at midnight on Tuesday along with a deadline to pay back a bill to the International Monetary Fund – with its default putting it in a small club of nations that include Zimbabwe, Somalia and Sudan.
“I was going to vote “No” because I think the Greek people are being treated with contempt. But Tsipras has made the situation so much worse, it’s his fault the banks are closed”, said shop assistant Suzanna Alizoti.
German Finance Minister Wolfgang Schaeuble responds by saying that “Greece must clarify its position on what it wants” before bailout talks can resume. The country has put limits on cash withdrawals in order to keep banks from collapsing.
A broken window in front of a poster featuring Euro banknotes in a money transfer shop in Omonia on June 12, 2012 in Athens, Greece.
Draghi, he said, had faced down “hawks” among eurozone members who had demanded that Athens increase collateral needed to receive continued assistance.
About 1,000 bank branches around the country were ordered by the government to reopen Wednesday to help desperate pensioners without ATM cards cash up to 120 euros ($134) from their retirement checks.
Some pensioners were told their pensions had not yet been deposited, AP said.
“It’s very bad”, said retired pharmacy worker Popi Stavrakaki, 68.
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At a news conference to outline the Bank of England’s latest Financial Stability Report, its governor Mark Carney warned the outlook for United Kingdom financial stability had “worsened” because of the crisis in Greece. “I have no idea why this is happening”.
