Friday, July 3, 2015

'Yes' camp takes slim lead in Greek bailout referendum poll

--

The word 'Yes' in Greek is seen on a banner during a pro-Euro rally in front of the parliament building, in Athens, Greece, June 30, 2015 

Supporters of Greece's bailout terms have taken a wafer-thin opinion poll lead over the 'No' vote backed by the leftist government, 48 hours before a referendum that may determine the country's future in the euro zone.

The poll by the respected ALCO institute, published in the Ethnos newspaper on Friday, put the 'Yes' camp on 44.8 percent against 43.4 percent for the 'No' vote. But the lead was well within the pollster's 3.1 percentage point margin of error, with 11.8 percent saying they are still undecided.

Given a volatile public mood and a string of recent election results that ran counter to opinion poll predictions, the result is in effect completely open.

With banks shuttered all week, cash withdrawals rationed and commerce seizing up, the vote could decide whether Greece gets another last-ditch financial rescue in exchange for more harsh austerity measures or plunges deeper into economic crisis.

It could also determine whether Greece becomes the first country to crash out of the 19-nation European single currency area, membership of which is meant to be irrevocable.

The survey found that 74 percent of Greeks want to stay in the euro, while just 15 percent want to return to a national currency, with 11 percent undecided.

Prime Minister Alexis Tsipras has urged Greeks to reject the "humiliating" terms offered last week by international creditors in a deal that is no longer on the table, and accused lenders of "blackmail" by withholding credit.

As discontent has mounted over long queues for pensions and at cash machines, Tsipras promised voters banks would reopen as soon as the government clinched a fresh loan from its euro zone partners.

Credit ratings agency Fitch said the banks were already effectively bust and would go to the wall within days unless the European Central Bank increases emergency liquidity assistance to help them cope with a wave of withdrawals.

There has been little time for campaigning but Tsipras is due to address a mass rally of 'No' supporters in Athens' central Syntagma Square outside parliament on Friday evening, while 'Yes' campaigners plan a rally at the old Olympic Stadium.

The 'No' campaign has directed much of its venom at Germany, the euro zone's dominant power and Greece's biggest creditor.

One poster plastered in central Greece shows a picture of German Finance Minister Wolfgang Schaeuble with the slogan: "For five years he's been sucking your blood. Tell him NO now."

Two Greek citizens are seeking the suspension of the vote as unconstitutional and illegal, arguing that it was called at too short notice, that the constitution bars questions relating to fiscal policy, and that the question is unclear and too complex.

Many Greeks may be unable to cast ballots, either because they are abroad and have to return to the country to vote, or because they do not have the money to return to their home constituencies because of the cash restrictions.

Financial hole

The International Monetary Fund warned on Thursday that Greece faces a huge financial hole regardless of the outcome of the referendum and would need some 50 billion euros as well as a massive debt writedown.

The assessment, in a preliminary draft of the Fund's latest debt sustainability report, underlined the scale of the problems facing Athens, whatever the referendum result and whatever government is in office to deal with it.

Tsipras may not survive long if voters ignore his call to vote 'No' and it could be up to a new government to negotiate a new deal.

But even if European leaders are willing to sit down immediately with an Athens government, it may be several weeks before a new bailout is sorted out, European Commission Vice-President Valdis Dombrovskis told Germany's Die Welt daily.

Tsipras said this week that the banks would be able to open immediately an agreement was reached, which he said would be possible 48 hours after a referendum.

But he may not be in office long and in any case, any decision on whether to reopen the banks will depend on whether the European Central Bank is ready to restore the emergency funding the crippled banks need to stay afloat.

That is far from certain as ECB Governing Council member Vitor Costancio made clear when asked whether funding would be restored. "I cannot in advance answer that question," he said, adding that a 'No' vote would make agreement difficult.

"If the result will be a 'Yes', then it's the opposite: "it seems it will be easier to reach an agreement," he said.

Greece's European partners, alarmed that a Greek exit would change the nature of a 15-year-old currency union intended to be unbreakable, have made clear they regard the vote as a choice of whether Greeks want to stay in the euro.

Greeks have been bombarded with dire warnings of what a 'No' vote could mean for their future in Europe.

"If the Greeks will vote "No", the Greek position is dramatically weakened," European Commission President Jean-Claude Juncker said on Friday, declining to say whether creditors would re-open negotiations in that case.

But as the deadline approached, the overall tone appeared cooler as if in recognition of the fact that after five years of bailout-imposed austerity, even those Greeks who intend to vote 'Yes' have little appetite for yet more advice from abroad.

"It's for Greeks to decide," said Jeroen Dijsselbloem, chairman of the Eurogroup of euro zone finance ministers when asked by reporters how Greeks should vote. "It's important for Europe, but important above all for Greece."

If voters back a bailout plan the government has scorned, Tsipras and Finance Minister Yanis Varoufakis have said they would quit. That would lead to a scramble to either try to put together a national unity government to negotiate a loan deal or call new elections by September.

Already, Tsipras' coalition is under strain as a succession of deputies from the right-wing Independent Greeks, his junior partners, have backed the 'Yes' vote.

Varoufakis, who alienated many euro zone colleagues with his economic lectures and outspoken style, said the IMF's report vindicated Greece's demands to put debt relief at the center of the negotiations.

"It is music to our ears because what we have been saying right from the beginning is that the great, big reason why we have a huge crisis here in Greece is because our debt is unsustainable," he told.