Greece 'No' in referendum sends euro into tailspin

Greece's government today looked to have won a 'No' it had been seeking in a referendum on bailout terms, but the euro immediately plummeted on fears the result could splinter the eurozone. An official tally of over half the ballots cast showed a resounding 61 per cent of Greek voters had backed the government's 'No' in the plebiscite.

Greece 'No' in referendum sends euro into tailspin
Senior eurozone officials were to hold talks tomorrow to discuss the result, a European source told AFP. France's President Francois Hollande and German Chancellor Angela Merkel were to meet in Paris the same day to assess the result, the French presidency said.

Hollande also spoke with Greek Prime Minister Alexis Tsipras by telephone late Sunday. Merkel's deputy chancellor, German Economy Minister Sigmar Gabriel, said Greek Prime Minister Alexis Tsipras had "torn down bridges" between his country and Europe with the vote. New negotiations on a bailout were now "difficult to imagine," he told the Tagesspiegel newspaper.

The euro crashed 1.6 per cent in the wake of the referendum, to USD 1.0963, in electronic trading before Asian markets opened. Several EU leaders had said a 'No' vote could see an end to further bailout negotiations, forcing Greece to leave the 19-nation eurozone -- and possibly even the European Union -- in a "Grexit". But Athens insisted the result meant it was better placed now to demand its international creditors -- the European Commission, European Central Bank (ECB) and the International Monetary Fund (IMF) -- drop harsh austerity demands and accept a restructuring of its debt.

"With this result, the prime minister has a clear mandate from the Greek people," government spokesman Gabriel Sakellaridis said on television. "Initiatives will intensify from this evening (Sunday) onward so that there can be a deal" on a new bailout, he said. He added that the Bank of Greece was immediately asking the European Central Bank to inject emergency euro cash for Greece's depleted banks, which have been shuttered all week because of capital controls.

Defence Minister Panos Kammenos, who also leads the junior coalition party in Prime Minister Alexis Tsipras's leftwing government, said in a tweet that the Greeks "proved they don't bow to blackmail, to threats".

A growing crowd of 6,000 gathered in central Athens late Sunday to celebrate the 'No' vote. The scene was festive, with cheering and smiling Greeks shouting "Oxi" (No) and hugging each other. 


Read more about: greece, eurozone
Story first published: Monday, July 6, 2015, 2:05 [IST]
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