'Betrayed' Juncker urges Greece to vote 'Yes' to stay in euro

'Betrayed' Juncker urges Greece to vote 'Yes' to stay in euro
PHOTO: Reuters

BRUSSELS - European Commission head Jean Claude Juncker Monday urged Greece to vote "yes" in a referendum on bailout proposals or leave the euro as a bank shutdown ordered by Athens left the Greeks desperately scrambling for cash.

A visibly emotional Juncker launched a blunt attack on Greek premier Alexis Tsipras, saying he felt "betrayed" by the leftist government's behaviour and adding it was time for them to tell voters "the truth".

With capital controls in place, Greece is hurtling toward an IMF default on Tuesday and possible exit from the euro after the shock breakdown of debt talks with creditors on Saturday.

"I will tell the Greeks, who I love deeply, that you shouldn't choose suicide just because you are afraid of death," the former Luxembourg premier said, urging them to vote "Yes" in Sunday's vote.

"A 'No' would mean, regardless of the question posed, that Greece had said no to Europe," he added a press conference in Brussels.

Juncker's frustration at 40-year-old Tsipras was particularly poignant because, in five months of fraught debt talks, the EU chief has been Greece's closest and sometimes only ally.

In response, Athens swiftly questioned Juncker's "sincerity" in the negotiations.

Tsipras stunned Europe late Friday by calling a referendum for July 5 in which Greeks must decide whether to back a bailout agreement with creditors.

'No money, no hope

Some EU leaders said the vote would actually decide Greece's future in the euro.

German Chancellor Angela Merkel, calling for a compromise, warned that "if euro fails, Europe fails." She added that she was ready for new talks with Greece's government but that any new negotiations should come after the referendum.

"What is at stake is whether or not Greeks want to stay in the eurozone (or) take the risk of leaving," said French President Francois Hollande, while defending Greece's "sovereign choice".

Tsipras, whose Syriza party came to power in January on an anti-austerity platform, has advised voters against backing a deal he said spelt further "humiliation" for a country that has endured five years of recession, turmoil and skyrocketing unemployment.

Eurozone finance ministers on Saturday angrily denied Greece the extension to its bailout agreement that would have kept it financially afloat beyond June 30 until the vote date.

That shock decision sparked a desperate cash run by shaken Greeks who rushed to ATM machines, putting a near-fatal strain on the country's already teetering banks.

To stop the outflow, Athens issued a decree to close banks until July 6 - the day after the referendum - with a 60-euro (S$90) limit on cashpoint withdrawals. Foreign tourists, a vital engine of the Greek economy, are exempt.

However, the drastic measures - designed to protect the banking system against the threat of mass panic - still sent Greeks rushing to withdraw their daily minimum.

"No money, no hope, how did we get in this situation? This is Black Monday," unemployed Chris Bakas, 28, told AFP as he stood sweating in the Athens sun, staring at an ATM screen.

On the city's historic Syntagma square, the scene of fierce riots in the past over biting austerity measures, tourists snapping photographs said they felt the tension in the air.

The Athens stock market has meanwhile been shut until July 7.

Agreement still possible?

The rapid escalation of the Greek debt crisis came after the European Central Bank froze the level of its emergency lifeline for Athens on Sunday, pushed by the eurozone's ministers' refusal to extend the bailout.

Global stocks fell, with the Dow Jones Industrial Average in New York opening at 17,807.25, down 139.43 points (0.78 per cent).

Frankfurt and Paris at one point lost three per cent after a slump in Asia, as investors feared a 'Grexit'.

The euro steadied after hitting a one-month low under $1.10 on Sunday.

" Greece's decision to shut banks over the weekend is just the most dramatic element of a crisis that has spiralled out of control," said Chris Beauchamp, senior market analyst at traders IG.

"Time has almost run out to keep Greece in the eurozone, but even now it is perhaps unwise not to discount the possibility of an emergency package that will avert disaster," he added.

Unless creditors accede to Tsipras's renewed request for a bailout extension, Greece's rescue plan will formally expire Tuesday.

Hollande said Paris was "always available" for negotiations with Athens - and that a bailout deal remained possible.

No deal will almost certainly mean Greece will default on more than 1.5 billion euros ($1.7 billion) due to the IMF that same day.

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