As it happened: EU urges Greece 'yes' vote

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As it happened: EU urges Greece 'yes' vote
A man walks past graffiti reading "NO" in German in Athens on Monday. Photo: DPA

With 'Grexit' (Greek exit from the euro) looking increasingly likely on Monday, Germany remained at the centre of efforts to keep it in the single currency. Catch up on a day of dramatic action here.


Key points:

  • Chancellor Angela Merkel and European Commission President Jean-Claude Juncker urge Greeks to vote yes in July 5th Greek referendum on whether to accept creditors' terms for international bailout
  • Banks in Greece closed until July 7th and ATM withdrawals capped at €60 a day
  • Greek stock exchange closed on Monday 
  • Greek crisis hits euro on currency and bond markets, with stock markets falling

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18.00 - Well that's it for The Local's live coverage of the Greece crisis for Monday. What a day it was too! Join us again tomorrow for more drama as we head towards what an increasing number of commentators are calling an "inevitable" exit of Greece from the euro.  

 17.50 - Greek Prime Minister Alexis Tsipras is to appear on Greek national television tonight, he has confirmed on Twitter. He'll having plenty to say after an action-packed day in Europe and around the world.



17.20 - France has nothing to fear from a possible Grexit, analysts have told our French sister site.

If Greece does not pay its debt "we are not going to ask the French to write a cheque," said Agnès Benassy-Quéré, an economist at the Paris School of Economics. "There will be no short term impact for the French."

Fabien Tripier, an economics professor at the University of Lille-I, said the size of the Greek economy is not big enough to have a major impact on France.

"[France] is not going to have to increase taxes tomorrow to compensate for Greece not paying up," said Tapier who points to the fact that Franco-Greek commercial relations are not that developed and the Greek financial system is now pretty independent from other EU countries.

Meanwhile, Tomasz Michalski, Professor of Economics at HEC business school in Paris suggests the Greek crisis has actually been good for France, in some ways.

"The fact that the euro has remained weak has helped France boost exports to countries outside the eurozone like the US, UK and Switzerland," Michalski told The Local.
"For the last five years people have been preparing for this. French banks have got rid of Greek assets from their books, meaning only certain hedge funds and national governments are exposed." 
17.03 - Italian PM Matteo Renzi has now piped up, tweeting that Greece's decision come Sunday is a stark choice between the euro and the drachma. His call comes after a similar assertion from Jean-Claude Juncker during a fiery speech earlier in the afternoon.



16.37 - Germany's opposition parties have released their own statements after hearing from Chancellor Merkel and holding internal discussions.

“For us, the danger is greater than it appears to many at the moment,” said Anton Hofreiter, the Green party's most senior MP.

“An extraordinary summit of EU heads of state and government is desperately needed.”

His fellow opposition leader Gregor Gysi of the Linke (Left) party warned that governments had “a duty to save the euro and to save the EU.”

Gysi said he was glad to have had an “open” conversation with Merkel, but accused her of “carrying the main responsibility” for the crisis.

Meanwhile, Reuters reported that US markets fell sharply on Monday morning as fears about a Greek exit from the euro spread across the Atlantic. The Dow Jones, S&P 500 and Nasdaq were down as much as 0.9% shortly after the markets opened.

16.07 - After Angela Merkel said that "all European governments must negotiate on their own behalf and be able to face their own people," during her press conference this afternoon, there were quick reactions suggesting that Merkel was too influenced by public opinion - which in turn is dominated by media hostile to Greece.

"[Merkel] doesn't have much room for manoeuvre, but she could have a little more - she doesn't have to follow the Bild [Germany's biggest-selling tabloid, very hostile to Greece] line," Professor Anke Hassel of the Hertie School of Governance in Berlin told The Local.

"But on the other hand, the reactions and tactics of the Greek government over the last couple of months haven't made it easier for any German political actor to be more co-operative."

15.41 - Merkel tells journalists she and French President Francois Hollande learned about Greek plans for a referendum during a phone conversation with Alexis Tsipras on Friday evening. 

That call came after a private 20-minute conversation between Merkel and Tsipras on Friday morning in which the word referendum did not come up, Germany's N24 television station reports.

People campaign for a "no" vote in the Greek referendum outside the Greek parliament in Athens. Photo: DPA

15.36 - A very measured Merkel has just spoken about the consequences of the Greek referendum.

"I know that the Greek people want to make their own minds up. We can't create the impression that we're putting pressure on them, she says.

Greece is our friend, a euro and EU member, but we have to clearly say what consequences there will be (if they vote no in Sunday's referendum).

The Greek people will make up their own mind, but we as the 18 who have negotiated must say that we've made a good offer.

Asked by a journalist if she planned to visit Athens, she said she thought the modern media was perfectly capable of transmitting her message.

People queueing at an Athens cashpoint on Monday June 29th. Photo: DPA

15.27 - Merkel has now appeared, kicking off with a few pointed barbs aimed at her Greek counterpart. 

"Europe can only work when we're prepared to compromise: no one can get 100 percent," she told journalists of the failed talks over a proposed bailout for Greece.

The generous offer (to Greece) was our contribution to the compromise, but "Europe can only act when self-responsibility and solidarity are two sides of the coin," she said. 

Self-responsibility and solidarity continue to belong together: if they don't, the Euro fails, and we don't want that."

14.54 - Chancellor Angela Mekel was due to kick off a press conference following her hurriedly-called meeting with German party leaders at 14.30.

Instead, the assembled journalists have been staring at a blue wall for the best part of half an hour. We suspect the conversation is getting pretty heated behind the scenes in the Chancellery:

14.14 - The German banking federation is confident that Greece going bankrupt wouldn't undermine the German economy, based on a study conducted at the end of 2014.

German banks have loaned around €2.4 billion to Greek customers, but few hold any government bonds since the last debt restructuring in early 2012, when Greek government debt was slashed by half.

“Greek bankruptcy could briefly weigh on the financial markets, but today there are no longer fears of the contagion effects that were possible at the beginning of the Euro crisis,” said banking federation (BdB) general manager Michael Kemmer.

The banking federation's comments were matched by Italian finance minister Pier Carlo Padoan, who told Corriere de la Sera that “I would not be surprised but neither would I be that concerned if there was an increase in market volatility. The European Central Bank has all the instruments at its disposal to deal with it."

The main concern for Italy is the possibility of its borrowing costs being forced up as a result of the crisis – a scenario Padoan insisted was unlikely.

“The BCE can intervene through QE (Quantitative Easing), the purchase of bonds on national markets to stabilise the spread,” he said.

The “spread” Padoan referred to is the gap between German borrowing costs on capital markets and those of Italy, a figure which is closely followed as a benchmark indicator of market confidence in the country’s economy and finances and ultimately its ability to remain part of the eurozone.

13.35 - Dramatic moments in Brussels as European Commission President Jean-Claude Juncker speaks about the Greece crisis.

"This is not a stupid austerity package," he told a packed press conference, adding that it was time to tell the truth to the people of Greece about what would be necessary to stay in the eurozone.

He has called on Greeks to vote yes in Sunday's referendum. Vote yes to stay in the eurozone, he tells the people of Greece — what appears to be a clear statement that the result of the vote could see the country exiting the EU's single currency system. 


He's using very dramatic language here telling Greeks not to "commit suicide because you are afraid of death".

"I have done everything I can to deliver a deal," he says in a speech that appears to have crashed EU servers. 

He has effectively blamed Alexis Tsipras for killing off talks by calling a referendum, pointedly mentioning the "difficult paths" taken by other European countries during the economic crisis. 



13.16 - There has been some confusion about the €60 cap placed on ATM withdrawals in Greece. This does not apply to tourists or others using foreign-issued in Greece, according to Greece's Ministry for Economy, Infrastructure, Shipping and Tourism.

But that didn't stop the the foreign ministries of various European countries telling people on Sunday not to rely on ATM machines.

12.38 - Merkel has just been speaking about the Greece crisis at the 70th anniversary conference of her CDU party. She didn't detour from the script:

"If the euro fails, Europe fails," Merkel said. 

"We could say, let's give up, but I say that in the medium and long-term that will damage us, and we will no longer be a relevant factor in the world. We must fight for the readiness to compromise and for the basic values of Europe.
"Europe can get through the crisis we're experiencing with Greece today thanks to the work we've done in the past years
"We want Europe to come out of this crisis stronger than  it went in, not only economically, but also in terms of the values for which we stand in the world. Solidarity and individual effort are the basis of the collective goal we're all working towards."
12.28 - This just in from French news agency AFP: German Chancellor Angela Merkel is still prepared to hold talks with Greek Prime Minister Alexis Tsipras despite the breakdown in debt negotiations at the weekend, her spokesman said on Monday.

"Of course she is still willing to speak to Prime Minister Tsipras if he would like to," the spokesman, Steffen Seibert, told reporters.

Finance Minister Wolfgang Schaeuble was also still open to talks with his Greek counterpart, Yanis Varoufakis, a finance ministry spokesman added at the same news conference.



12.16 - A German finance ministry spokesman has tried to calm jittery nerves at home by telling news agency DPA that Germans had "no cause for concern".

Pointing out Greece's small contribution to European GDP and German banks' limited exposure to Greece, he said that "there will be no effects for German citizens and savers".
12.07 - Swedish Prime Minister Stefan Löfven is not exactly impressed with the Greek parliament's decision to call a snap referendum.

"What happened the other day when Greece suddenly said that they wanted a referendum at the eleventh hour, and also believe that the people ought to vote no — that kind of action does not impress me," he told Swedish radio.

"But it doesn't have to mean that the euro as such falls apart. There is an alternative plan in the euro group if worst came to worst and Greece actually quit," he said.

Incidentally, Sweden's great and good are currently gathered at the country's annual Almedalen talkfest on the island of Gotland where Greece is far from the only topic up for discussion. See our sister site for live coverage

11.41 - French President Francois Hollande on Monday backed Greece's decision to hold a referendum. He said it was a "sovereign choice" on whether or not to leave the eurozone.

"It is democracy, it is the right of the Greek people to decide what they want for their future. What is at stake is whether or not Greeks want to stay in the eurozone (or) take the risk of leaving," he said after an early morning cabinet meeting. 

Meanwhile, on Sunday French Prime Minister Manuel Valls said there was a "real risk" of Greece leaving the eurozone if the Greek people vote against the EU's bailout proposals.

11.30 - The Greek government is getting plenty of support over its decision to hold a referendum in Spain, with the hashtag #YoVoyConGrecia (I'm with Greece) a trending topic over the weekend.



"The attitude of the EU and IMF makes me sick"

People — including Pablo Iglesias and fellow leaders of Spain's 'indignant' Podemos party — also took to the streets in support of Alexis Tsipras and his government.



11.18 - The impact of the Greece crisis is being felt in Denmark too, with the Copenhagen Stock Exchange down 4.12 percent on Monday morning, our colleagues in Denmark report.



11.09 - Germany's EC Commissioner for Digital Economy and Society Günther Oettinger has weighed in on the Greece crisis: "We want to do everything to prevent harm to the people of Greece. We want, if we can, to keep Greece in the eurozone. Whether we will succeed is more than questionable."

11.01 - Angela Merkel and German Vice-Chancellor Sigmar Gabriel will hold a press conference at 2.30pm following this afternoon's meeting of German party leaders, German news agency DPA are reporting. 

That meeting, to start at 1.30pm is designed to provide an update on the Greece situation, according to Germany's official government website.  

10.53 - The Swiss National Bank has weakened the Swiss franc to lessen the impact of the Greek crisis after the Swiss stock market dropped more than 3 percent on Monday morning.

10.37 - Blockupy, the organization behind protests at the European Central Bank headquarters in Frankfurt which descended into violence in March, has called for a demonstration in support of Greece on Friday.

Conveniently, this will take place at 6pm, after most people have left work.

"The Greek referendum on the blackmailing austerity policy of the institutions is a historic and moving moment for democracy," they write.
"Europe stands at a crossroads. The institutions of the Troika want to stop the Greek attempt at an alternative to austerity policy by any means... this isn't just a conflict between Greece and the Troika, but two opposing visions of Europe."
"A different Europe is possible!"
10.23 - Interviewed by German newspaper Bild for its Monday edition, Greek finance Minister Yanis Varoufakis said that “we couldn't agree [to the creditors' proposals on Friday] but neither could we just dismiss them” - which he says left the government with only the referendum option.

“We're always open for new proposals from the institutions. If these new proposals come and we think they're significantly better, we can always change our recommendation and suggest that the electorate votes in favour.”

Varoufakis adds that the Greek government led by his radical-left Syriza party won't be making any new proposals before the referendum.
“We had to take this step [of calling a referendum] since Europe forced this terrible event – only to humble our government and despite the considerate, moderate, reconciliation-oriented proposals from our side.”
But the charismatic finance minister said that he “remains an eternal optimist” - for Europe to heal itself, it would simply need to “emphasize what it has in common”.
It would be up to heads of government like Merkel, he said, to negotiate in place of the slow-moving EU leadership in Brussels.
“As a representative of the most important country, Chancellor Merkel has the key in her hand. I hope she uses it.”
"Merkel spoke in 2011 of a 'market-aligned economy'. And now it's clear what happens to democracies that don't conform to the market, " tweets Sascha Lobo, a contrarian commentator and journalist with a regular column on digital policy at Spiegel Online.
10.18 - Latvia's European Commissioner Valdis Dombrovskis ('Commissioner for the euro and social cohesion') has cancelled a planned visit to Sweden's Almedalen — the Nordic nation's annual gathering of power players on the island of Gotland in the midst of the crisis surrounding Greece's position in the eurozone. 

10.10 - Katja Kipping, head of the opposition Linke (Left) party in Germany, has said on breakfast TV that Tsipras was right to call a referendum.

“I find that this is the right way, that's how democracy works,” she told ARD's Morgenmagazin.
“It's the people who will pay, and that's why they should decide,” she added.
If Greece were to exit the Eurozone, Kipping said, “Angela Merkel will enter the history books as the Chancellor under whom the end of the eurozone began.”
10.00 - Stock markets have opened lower all round Europe. In Germany, the stock market was down 5 percent, and in Paris markets opened 4.7 lower. Borrowing costs in Italy and Spain were also up.  

09.43 - Chancellor Angela Merkel invited the heads of the different parties in the Bundestag (German parliament) to an emergency conference in the Chancellery on Monday afternoon.

Merkel will update the party leaders of her own Christian Democratic Union (CDU), their allies the Christian Social Union (CSU), coalition partners the Social Democratic Party (SPD) and opposition Greens on the latest developments in the Greek crisis.

The Chancellor had earlier telephoned with US President Barack Obama, with both sides agreeing that everything should be done to allow Greece to remain in the Eurozone and implement reforms to turn around its economy.

European politics was stunned on Friday night by Greek Prime Minister Alexis Tsipras' snap decision to hold a referendum on reforms demanded by the country's creditors in exchange for further financial support.

His move was condemned by the International Monetary Fund (IMF) head Christine Lagarde, who said on Saturday that by the time Greeks vote on July 5th the deal offered to Greece on Friday will be off the table.

Greek banks were closed on Monday to prevent customers from withdrawing too much money and undermining the banking system.

The European Central Bank said on Sunday that it would not increase emergency cash supplies that have been keeping the banking system afloat.

As markets opened in Asia and Europe on Monday morning, the Euro began losing value and the German DAX stock market index plunged by 4.36 percent to 10,990 points.



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