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 Less than 24 hours after he wrote a conciliatory letter to creditors
asking for a new bailout that would accept many of their terms,
Tsipras abruptly switched back into combative mode in a television
address.
Greece was being "blackmailed", he said, quashing talk that he might
delay the vote, call it off or urge Greeks to vote "Yes".
The remarks added to the frantic and at times surreal atmosphere of
recent days in which acrimonious messages from the leftist
government have alternated with late-night offers of concessions to
restart negotiations.
A day after Greece became the first developed economy to default on
debt to the International Monetary Fund, long lines at cash machines
provided a stark symbol of the pressure on Tsipras, who came to
power in January vowing to end austerity and protect the poor.
"A 'No' vote is a decisive step toward a better agreement that we
aim to sign right after Sunday's result," he said, rejecting
repeated warnings from European partners that the referendum would
effectively be a vote on whether Greece stays in the euro or returns
to the drachma.
European Council President Donald Tusk retorted in a tweet: "Europe
wants to help Greece. But cannot help anyone against their own will.
Let's wait for the results of the Greek referendum."
Euro zone finance ministers held an hour-long conference call to
discuss the previous night's offer from Tsipras, but were adamant
that no further discussions would be held until after Sunday's vote.
"We will come back to your request for financial stability support
from the ESM (European Stability Mechanism) only after, and on the
basis of the outcome of, the referendum," the head of the currency
zone ministers' Eurogroup, Jeroen Dijsselbloem, wrote in a letter to
Tsipras.
IMF Managing Director Christine Lagarde told Reuters in an interview
that she would want to see reforms before opening discussions on any
new debt package.
Global financial markets have reacted remarkably calmly to the
widely anticipated Greek default, strengthening the hand of hardline
euro zone partners who say Athens cannot use the threat of contagion
to weaker European sovereigns as a bargaining chip.
In his overnight letter to creditors, seen by Reuters, Tsipras
agreed to accept most of their demands for taxes and pension cuts
and asked for a new 29 billion euro loan to cover all debt service
payments in the next two years.
However, even if negotiations do restart after the referendum,
Germany and others made clear that any talks on a new program would
have to start from scratch with different conditions.
The exasperated tone to public comments of European leaders
exhausted by the chaotic turnarounds of the past few days offered
little hope of a breakthrough.
Tsipras has suggested he would step aside if Greeks vote "Yes" in
Sunday's referendum.
PENSIONERS SUFFERING
"This government has done nothing since it came into office," German
Finance Minister Wolfgang Schaeuble said in a speech in the lower
house of parliament in which he accused Athens of repeatedly
reneging on its commitments.
"You can't in all honesty expect us to talk with them in a situation
like this," he said.
French Finance Minister Michel Sapin, among Greece's strongest
sympathizers in the euro zone, told RTL radio, "The aim is to find
an agreement before the referendum if possible ... But it's
dreadfully complicated."
Lagarde declined to be drawn out on whether she viewed Tsipras was a
reliable negotiating partner after his latest switch, although she
did say the Fund wanted to see evidence of reforms before talks
about any new potential debt package.
"We have received so many 'latest' offers, which themselves have
been validated, invalidated, changed, amended, over the course of
the last few days, that it's quite uncertain exactly where the
latest proposal stands," she said.
Greece has shut its banks this week, imposed capital controls and
limited teller machine withdrawals to prevent the public from
emptying the banks.
On the third day of the closure, the costs were biting deeper for
ordinary Greeks, with long lines forming at many ATMs and limited
amounts of cash being doled out to pensioners. Even with a
withdrawal limit of 60 euros a day, there were signs of banknote
shortages, with bankers saying 50-euro and 20-euro notes were
running low.
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The European Central Bank said it would maintain emergency lending
that is keeping Greek banks afloat at the same level as late last
week, keeping pressure on Greece as its lenders run out of cash.
Kiki Rizopoulou, a 79-year-old pensioner from Lamia in central
Greece, had to travel to Athens to collect her pension, spending 20
euros of the 120 euros she was allowed to withdraw.
"I already have to pay back 50 euros that I owe. It's embarrassing,"
she said.
An opinion poll showed opposition to the bailout in the lead but
also that the gap had narrowed significantly as the bank closure and
capital controls began to bite.
Posters from the ruling Syriza party calling for a "No" vote started
to appear in central Athens. A large white banner declaring 'No to
blackmail and austerity!' was unfurled from windows of the finance
ministry.
Finance Minister Yanis Varoufakis said on Twitter that it was the
work of "unionists" and it was later removed.
SCEPTICISM
The Tsipras letter asking for a new bailout deal appeared to move
closer to accepting creditor demands. But it contained only a single
sketchy reference to labor market reform and no mention at all of
frozen privatizations, both big priorities for the creditors.
He asked to keep a discount on value-added tax for Greek islands,
stretch out defense spending cuts and delay the phasing out of an
income supplement to poorer pensioners.
The lack of panic in financial markets stood in marked contrast to
2011, when the Greek crisis was perceived as a threat to the future
of the single currency and investors bid up the borrowing costs for
other countries seen as being in danger, like Spain and Italy. Most
euro zone leaders now believe any damage to the currency zone from
Greek turmoil can be contained.
"Financial markets are not showing there is contagion or spreading
of those risks to the periphery," Bank of England Deputy Governor
Jon Cunliffe told BBC Radio 5live in an interview. But, in an
interview with Radio 4, Cunliffe warned that things could change.
"It's a very volatile situation. It's a very fluid situation. It is
a very dangerous situation.... We have to prepare for the worst," he
said.
In a poll by the ProRata Institute published in the Efimerida ton
Syntakton newspaper, 54 percent of Greeks planning to vote would
oppose the bailout against 33 percent in favor.
Of those polled before the announcement of the bank closures, 57
percent said they would vote "No" against 30 percent who would vote
"Yes". However among those polled after, the "No" camp fell to 46
percent against 37 percent for "Yes".
Seeking a "No" vote, Varoufakis told state television a deal would
then swiftly follow, even as early as Monday, and the capital
controls would go.
"The ECB will press the button," he said.
(Additional reporting by Lefteris Karagiannopoulos in Athens, Mike
Dolan in London, Michelle Martin, Madeline Chambers and Gernot
Heller in Berlin, Anna Yukhananov in Washington; Writing by Paul
Taylor and James Mackenzie; Editing by Peter Graff, Gareth Jones,
Simon Cameron-Moore)
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