Greek referendum: Greece votes No to bailout terms

Greeks have voted overwhelmingly to reject terms of a bailout, risking financial ruin in a show of defiance that could splinter Europe.

Greece's prime minister Alexis Tsipras said in a press conference on Sunday night that his government was ready to return immediately to negotiations with creditors in a bid to get shuttered banks open again.

Mr Tsipras, who insisted the result would give him a stronger hand to reach a better deal, said the resounding No vote showed that “democracy won’t be blackmailed”. With 87 per cent of the votes counted, the No side had more than 60 per cent.

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Supporters of the Syriza party and No campaign react after first results of the referendum at Klafthmonos square in central Athens, Greece. Photograph: Kay Nietfeld/EPA

“Today we celebrate the victory of democracy,” said Mr Tsipras, who gambled the future of his five-month-old left-wing government on the vote, said in an address to the nation.

Dismissing talk that the referendum was effectively a vote on whether Greece stays in the euro, Mr Tsipras said the mandate that Greeks had given him was to reach a viable solution rather than clash with Europe.

“With the difficult circumstances prevailing today you made a very brave choice,” Mr Tsipras said. “I’m fully aware the mandate you gave me is not one of a rupture with Europe but a mandate to strengthen our negotiating position to seek a viable solution.”

Mr Tsipras said he would ask the country’s president to summon a meeting of political party leaders to brief them on the situation.

Meanwhile, France and Germany have called for an emergency summit of euro zone leaders to discuss Greece’s stunning referendum vote, as calls mounted in Berlin to cut Athens loose from Europe’s common currency.

German chancellor Angela Merkel’s deputy said Athens had wrecked any hope of compromise with its euro zone partners by overwhelmingly rejecting further austerity.

Ms Merkel and French president Francois Hollande conferred by telephone and will meet in Paris on Monday afternoon to seek a joint response. Responding to their call, European Council President Donald Tusk announced that euro zone leaders would meet in Brussels on Tuesday evening .

The euro fell sharply in early Asia-Pacific trading on Monday, losing about 1.4 percent against the US dollar, as analysts for Citi, Barclays and other banks said a Greek exit was now their “base case” or most likely outcome.

Thunderous silence

There was a thunderous silence from top EU policymakers in Brussels and Frankfurt who conferred by telephone but avoided public appearances to comment on an outcome that was a stunning setback for EU governments but delighted Eurosceptic populists.

The European Commission said in a brief statement that it “takes note of and respects” the referendum result.

Former prime minister Antonis Samaras announced on Sunday evening he was stepping down as leader of Greece’s conservative New Democracy opposition party after a strong vote for the No position.

“Our party needs a new start. As of today, I’m resigning from the leadership of New Democracy,” Mr Samaras said in a televised statement.

Greece's finance minister Yanis Varoufakis said a No vote was a vote in favour of democracy and social justice that allowed Athens to call on its partners to find a fair deal.

“As of tomorrow, with this brave No the Greek people handed us.... we will extend a helping hand towards our lenders. We will call on each one of them to find common ground,” Mr Varoufakis told reporters. “As of tomorrow, Europe, whose heart is beating in Greece tonight, is starting to heal its wounds, our wounds. Today’s No is a big Yes to democratic Europe.”

Hundreds of Greeks began pouring into the central Syntagma square in front of parliament to celebrate on Sunday evening, after a week of building desperation as banks were shut and cash withdrawals rationed to prevent a collapse of the Greek financial system.

Greek banks, which have been closed all week and rationing withdrawals from cash machines, are expected to run out of money within days unless the European Central Bank provides an emergency lifeline.

Unchartered

A No vote puts Greece and the euro zone in uncharted waters. Unable to borrow money on capital markets, Greece has one of the world's highest levels of public debt. The International Monetary Fund warned last week that it would need massive debt relief and €50 billion in fresh funds.

Greek officials see the IMF report as a vital support for their argument that the bailout terms as they stood would merely have driven Greece further into depression.

Mr Tsipras called the referendum eight days ago after rejecting the tough terms offered by international creditors as the price for releasing billions of euros in bailout funds.

Opinion polls over the months have shown a large majority of Greeks want to remain in the euro.

But, exhausted and angry after five years of cuts, falling living standards and rising taxes imposed under successive bailout programmes, many appear to have shrugged off the warnings of disaster, trusting that a deal can still be reached.

Agencies