The European Commission has offered Greek voters a 10-point bailout plan and has urged them to vote to remain in the euro zone in a referendum to be held on July 5th.
Greece’s Prime Minister Alexis Tsipras announced on Friday that he would go to the people as Commission President Jean-Claude Juncker works on finalising the ten-point plan before a press conference to be held on Monday.
Juncker’s list of austerity measures was neither finished nor presented to the Eurogroup’s area finance ministers because of a “unilateral decision of the Greek authorities to abandon the process.”
The ten-point plan has been endorsed by the European Central Bank and the International Monetary Fund.
The IMF’s Christine Lagarde said “I shared my disappointment and underscored our commitment to continue to engage with the Greek authorities.”
Nearly half of Greece’s ATM cash machines ran out of money on Saturday and the government said today that the banks will remain closed on Monday for a week to prevent further widespread withdrawals. The Greek stock exchange also is closed until the referendum.Tourists are advised to take loads of cash when visiting Greece.
The new austerity package suggested for Greece involves higher and more taxes, especially VAT to 23% on most items and pension and labour market reforms. The plan deamnds that the Greek government “recognises that the pension system is unsustainable and needs fundamental reforms” and that pensions need to be cut.
Public wages, tax collection and corporate taxation are included in a plan that Greece's voters must accept if teh government wants any further money from the current bailout programme funders.
With cash leaving the banking system at unprecedented rates and the bailout end date of Jult 1st looming, Greece may have to impose capital controls as did Cyprus to the consternation of the business and international community.
The five year financial crisis looked likely to collapse the economy after Tsipras walked out of talks with Greece’s creditors last week and calling a referendum to ask his voters to decide on the aid package in return for liquidity.
Alexis Tsipras' move to hold a referendum has been criticised by his creditors as another delaying tactic when time has all but run out.
In Portugal the Left Bloc’s Catarina Martins said that the referendum in Greece "is the historic moment, an historic opportunity to end the dictatorship of the markets in Europe," and appealed to the left to be in solidarity with the Greek people.”
"We have seen over the years that European institutions and the financial markets have an aversion to democracy and, therefore, we understand the inconvenience this may be causing them," added Martins who praised Tsipras for deciding to let the people decide and suggesting this might be a good way forward for Spain, France (sic) and Portugal.
Antonis Samaras, leader of the New Democracy party this evening called for Tsipras to abandon the referendum plan, "Our country needs to remain at the heart of Europe and the euro. Mr. Tsipras should continue negotiations. If he does not get them done by himself, he should try and get a national consensus."
After announcing on television that deposits are safeguarded, Tsipras posted on Twitter adding that "the payment of salaries and pensions are also guaranteed," and that "In the coming days it will take patience and composure. The bank deposits of the Greek people are fully secure.”
