Athens told that a vote in this weekend’s referendum to refuse austerity would catapult the country out of Europe
By Matthew Holehouse, Brussels, Ambrose Evans-Pritchard, Justin Huggler, Berlin and Steven Swinford
10:49PM BST 29 Jun 2015
A supporter of the NO vote in the upcoming referendum wears a sign reading 'No" in Greek, German and English in Athens Photo: AP
George Osborne on Monday led attempts to strong-arm Greece into voting for a bail-out package as he warned that a Greek exit would threaten Britain’s financial stability.
Britain joined Germany, France, Italy and the European Commission in telling the Greek people that refusing austerity measures in next Sunday’s referendum would catapult them “from the eurozone and from Europe”.
Pensioners line-up outside a branch of the National Bank of Greece hoping to get their pensions, in Athens (Reuters)
It emerged on Monday night that British taxpayers could be tapped for hundreds of millions of pounds to support Greece if it leaves the currency, under emergency plans prepared by the EU.
Treasury sources conceded that Greece could request help from a balance of payments support system available to all 28 EU members to relieve its public finances. Britain pays into the scheme, which has previously been used by Hungary, Latvia and Romania.
The cash-strapped Greek government will also be hit today with a €1.9 billion bill for public salaries and pensions.
A group of pensioners queue outside a branch of the National Bank of Greece in the hope that it might open (Bloomberg)
On July 13, another €465 million is due to the IMF. Most crucially, on July 20 it must find €3.5 billion to pay the European Central Bank. Failure to do so would be likely to result in €88 billion of emergency loans to Greek banks being withdrawn, resulting in collapse and 'Grexit', the exit of Greece from the euro.
Greece on Monday published the ballot paper for Sunday’s vote, with No, or Oxi, at the top. The word carries powerful resonance in Greece from the day in October 1940 when it refused Mussolini’s ultimatum.
Mr Osborne told the Commons: “I don’t think anyone should underestimate the impact a Greek exit from the euro would have on the European economy and the knock-on effects on us.
“The eurozone authorities have made clear that they stand ready to do whatever is necessary to ensure financial stability of the euro area and we welcome that commitment to the currency.
“Equally the British Government and the Bank of England stand ready to ensure our financial stability in the UK,” the Chancellor said.
Mr Juncker said: “I will say to the Greeks, who I love deeply, you mustn’t commit suicide because you are afraid of death.”
“You must vote 'yes’, independently of the question asked. The whole planet would consider a Greek 'no’ to the question posed as meaning that Greece wants to distance itself from the eurozone and from Europe.”
In a rambling and self-pitying address in Brussels, Mr Juncker railed against Mr Tsipras’s “betrayal” and accused the “egotist, populist” of jeopardising “my major life’s work”.
Alexis Tsipras, prepares for a TV interview at the State Television (ERT) studios in Athens (AP)
“I will never let the Greek people go down, never, and I know that the Greek people don’t want to let down the European Union,” he said. “I have done everything, and we don’t deserve all the criticism being heaped upon us.”
Mr Juncker, who in a previous crisis said, “When the going gets tough, you have to lie” – was accused of a “preposterous lie” after claiming that the proposed bail-out contained no pension cuts.
Angela Merkel, who is under intense pressure from German taxpayers infuriated by bail-outs, said she could not soften the “generous offer” made to Greece.
“If the euro fails, Europe will fail,” she said. “That’s why we have to fight for these principles.
We could maybe say we’ll just give in. But I say: in the medium and long term, we will suffer damage that way.”
François Hollande, the French president, said France had “nothing to fear” from Grexit, while Matteo Renzi, the Italian premier, wrote on Twitter: “Euro vs drachma. This is the choice.”
Angela Merkel and and German economy minister Sigmar Gabriel (AFP)
Greece said the ultimatum was illegal because the European treaties contain no mechanism for a euro exit. “We are taking advice and will certainly consider an injunction at the European Court of Justice.
Our membership is not negotiable,” Yanis Varoufakis, the finance minister, told The Telegraph.
The Kremlin, which offered Mr Tsipras a hero’s welcome a fortnight ago and is a potential new lender, said it was “watching developments very closely”.
“We are concerned about the possible negative consequences for the whole of the EU,” a spokesman said.
Britain joined Germany, France, Italy and the European Commission in telling the Greek people that refusing austerity measures in next Sunday’s referendum would catapult them “from the eurozone and from Europe”.
Jean-Claude Juncker, the European Commission president, warned the Greeks – who are on Tuesday night expected to default on a €1.5 billion (£1.1 billion) loan from the International Monetary Fund (IMF) – not to “commit suicide” by rejecting the proposed €12 billion loans-for-reforms package. The threat comes despite voters being asked only whether they support the bail-out.
Some £36 billion was wiped off the value of major British companies on the FTSE 100 as markets slid around the world, while Greeks queued in their thousands at cash machines, petrol stations and supermarkets for a third day.
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Pensioners line-up outside a branch of the National Bank of Greece hoping to get their pensions, in Athens (Reuters) It emerged on Monday night that British taxpayers could be tapped for hundreds of millions of pounds to support Greece if it leaves the currency, under emergency plans prepared by the EU.
Treasury sources conceded that Greece could request help from a balance of payments support system available to all 28 EU members to relieve its public finances. Britain pays into the scheme, which has previously been used by Hungary, Latvia and Romania.
The cash-strapped Greek government will also be hit today with a €1.9 billion bill for public salaries and pensions.
A group of pensioners queue outside a branch of the National Bank of Greece in the hope that it might open (Bloomberg)
On July 13, another €465 million is due to the IMF. Most crucially, on July 20 it must find €3.5 billion to pay the European Central Bank. Failure to do so would be likely to result in €88 billion of emergency loans to Greek banks being withdrawn, resulting in collapse and 'Grexit', the exit of Greece from the euro.
Greece on Monday published the ballot paper for Sunday’s vote, with No, or Oxi, at the top. The word carries powerful resonance in Greece from the day in October 1940 when it refused Mussolini’s ultimatum.
Mr Osborne told the Commons: “I don’t think anyone should underestimate the impact a Greek exit from the euro would have on the European economy and the knock-on effects on us.
“The eurozone authorities have made clear that they stand ready to do whatever is necessary to ensure financial stability of the euro area and we welcome that commitment to the currency.
“Equally the British Government and the Bank of England stand ready to ensure our financial stability in the UK,” the Chancellor said.
Mr Juncker said: “I will say to the Greeks, who I love deeply, you mustn’t commit suicide because you are afraid of death.”
“You must vote 'yes’, independently of the question asked. The whole planet would consider a Greek 'no’ to the question posed as meaning that Greece wants to distance itself from the eurozone and from Europe.”
In a rambling and self-pitying address in Brussels, Mr Juncker railed against Mr Tsipras’s “betrayal” and accused the “egotist, populist” of jeopardising “my major life’s work”.
Alexis Tsipras, prepares for a TV interview at the State Television (ERT) studios in Athens (AP) “I will never let the Greek people go down, never, and I know that the Greek people don’t want to let down the European Union,” he said. “I have done everything, and we don’t deserve all the criticism being heaped upon us.”
Mr Juncker, who in a previous crisis said, “When the going gets tough, you have to lie” – was accused of a “preposterous lie” after claiming that the proposed bail-out contained no pension cuts.
Angela Merkel, who is under intense pressure from German taxpayers infuriated by bail-outs, said she could not soften the “generous offer” made to Greece.
“If the euro fails, Europe will fail,” she said. “That’s why we have to fight for these principles.
We could maybe say we’ll just give in. But I say: in the medium and long term, we will suffer damage that way.”
François Hollande, the French president, said France had “nothing to fear” from Grexit, while Matteo Renzi, the Italian premier, wrote on Twitter: “Euro vs drachma. This is the choice.”
Angela Merkel and and German economy minister Sigmar Gabriel (AFP) Greece said the ultimatum was illegal because the European treaties contain no mechanism for a euro exit. “We are taking advice and will certainly consider an injunction at the European Court of Justice.
Our membership is not negotiable,” Yanis Varoufakis, the finance minister, told The Telegraph.
The Kremlin, which offered Mr Tsipras a hero’s welcome a fortnight ago and is a potential new lender, said it was “watching developments very closely”.
“We are concerned about the possible negative consequences for the whole of the EU,” a spokesman said.
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