Defiant Greeks reject EU demands as Syriza readies IOU currency: there is so much bad blood after months of insults, frustration and failure, there is little faith

Tsipras Tries to Rally Greek Support for Bailout Proposal By LIZ ALDERMAN and ANDREW HIGGINSJULY 10, 2015 Photo Euclid Tsakalotos, the Greek finance minister, on Friday at a meeting of the Syriza party, which was said to be tense because of serious objections among legislators over the additional austerity measures that are laid out in the proposals. Credit Alkis Konstantinidis/Reuters ATHENS — Prime Minister Alexis Tsipras began the apparently delicate task Friday of selling his anti-austerity party and the rest of the Greek Parliament on a three-year rescue package that was remarkably similar to the one Greek voters overwhelmingly rejected in a referendum less than a week ago. Yet, with a Sunday deadline looming for a decision on the bailout, a crunch point that all sides see as Greece’s last chance to avoid bankruptcy and stay in the euro, Mr. Tsipras’s government coalition appeared set to approve the proposal. Far-left lawmakers who had originally sought to scuttle the bailout signaled their support, while a handful of coalition members said they would vote no. Parliamentary approval in Greece would set the stage Saturday for a possible approval by European countries of a deal that would allow negotiations to go forward on a comprehensive bailout package. Pensioners wait outside of a National Bank of Greece branch in Athens on Thursday. Greek Plan Accepts Austerity to Get Debt Relief JULY 9, 2015 The chief operating officer of the Greek jeweler Zolotas said he recently turned down a customer who wanted to buy more than a million dollars' worth of jewels. Greeks Spend in Droves, Afraid of Losing Savings to a Bailout JULY 8, 2015 Open Source: Tourists on Greek Island Join Local Volunteers to Aid Refugees JULY 7, 2015 Lawmakers took up the measure after a whiplash-inducing 24 hours in which Mr. Tsipras decided to give in to most of the demands of Greece’s creditors. In exchange, he won the opportunity to negotiate for $59 billion in new bailout money, on top of about $270 billion Greece has received since 2010, and potential negotiations to reduce the repayment terms on the debt. His capitulation also potentially allowed Greece to avoid a catastrophic exit from the euro. Easing Greece’s Payback Terms Is One of the Issues Under Debate 4h Are Germany and the I.M.F. Still on the Same Page on Greece? 4h Finance Minister Makes Case for Government’s Plan to Greek Parliament Even as a vote neared in the Greek Parliament, influential voices in Germany and Eastern Europe expressed skepticism throughout the day about whether Greece would follow through on pledges to be more fiscally responsible. And a crowd of people gathered outside the Parliament building in Athens Friday evening to protest Mr. Tsipras’s abrupt U-turn, with many saying they felt betrayed after he urged them to reject the bailout in the historic referendum last Sunday. One of the demonstrators, John Papageorgiou, 45, a teacher of mathematics to teenagers with special needs, said he would have liked for Greece to drop the euro currency, because he believed the euro advantaged certain countries, like Germany, while disadvantaging others, like Greece. Nonetheless, he said, he did not feel betrayed by Mr. Tsipras’s compromise efforts, and said he believed that the European leaders would recognize that Greece’s debt was illegal. His friend, Maria Antonopoulou, 44, who works for a public electric company, interjected, “We love Tsipras. We needed him as Greeks. We have faith in him. Compared to what we had, he’s clean.” Greek Prime Minister Alexis Tsipras at a session held Friday by the Syriza party, which he is a member of. Credit Jean-Paul Pelissier/Reuters Mr. Tsipras said that he would resign if he lost the vote in Parliament, which requires the support of 151 lawmakers to pass. Yanis Varoufakis, the former finance minister whom Mr. Tsipras asked to resign Monday, said on Twitter that he would not participate because of “family reasons.” Greek television broadcast images of him and his wife on Friday taking a ferry and their red Mini Cooper to their vacation home on the Greek island of Aegina. The new proposals were given a swift thumbs-up by France and lifted hopes in Brussels that, after months of ill-tempered arguments and fruitless crisis meetings, Greece and its creditors could reach a deal by midnight on Sunday to prevent a fracturing of Europe’s currency union. The goal is not to seal an agreement that would immediately provide Greece with fresh funding, but simply to get a formal green light to start what could be lengthy negotiations on a new bailout to replace one that expired on June 30. Just the signal to start talks, though, could lift, at least temporarily, a dark cloud of uncertainty and give the European Central Bank cover to perhaps expand recently frozen emergency cash for Greek banks, which have been closed since June 29. What Leaders Are Saying About the Greek Proposal European leaders weighed the latest measures from Athens. A final agreement is still far from a sure thing. A raft of actors — 19 eurozone finance ministers, 28 European Union leaders, who have been called to Brussels to discuss the crisis on Sunday and the various bureaucracies in Brussels — need to examine the proposal in detail before giving their approval. And there is so much bad blood after months of insults, frustration and failure, there is little faith in European circles in Greece’s pledges to carry out a raft of measures like tax increases and cuts in pension spending. Representatives of the main creditors — the International Monetary Fund, the European Central Bank and the other European nations that use the euro — were poring over the Greek proposal on Friday. Their assessments will play a critical role in any decisions by the Eurogroup, an assembly of finance ministers from euro-using countries, which is scheduled to meet in Brussels on Saturday. Even Mr. Tsipras’s party, Syriza, which drafted the proposals with help from French experts, seemed confused, with members voicing concern over measures that the culture minister, Nikos Xydakis, described on Friday as “very tough.” Many lawmakers from Syriza, an argumentative coalition of left-wing groups, had serious misgivings about the proposal, but as the discussions continued Friday seemed to agree in essence with Is Greece Worse Off Than the U.S. During the Great Depression? The economy has been in disarray. People have been out of work for years. The banks have been running out of money. It sounds a lot like the Great Depression in the United States. But it is Greece – and in some ways, the situation is worse. Mr. Xydakis said in an interview: “No, it’s not a better deal. It’s a tough deal and the only one we can get right now.” Euclid Tsakalotos, the new finance minister, defended the government’s proposal to creditors on Friday, telling the Greek Parliament that the plan reflected an earlier joint statement by party leaders that called for debt relief and emergency funding in return for “credible measures.” Arriving for the session on Friday morning, a visibly rattled Panagiotis Lafazanis, the energy minister who leads Syriza’s radical Left Platform faction and has railed against further austerity, refused to answer reporters’ questions. Mr. Xydakis, complained that Greece faced an “intransigent Germany,” adding: “We will have to see how we will survive in this very tough framework.” Greece’s Debt Crisis Explained The latest on Greece’s evolving nightmare. Speaking to members of Syriza in the parliament building on Friday, Mr. Tsipras said his government has a “mandate from the Greek people to bring a better agreement” but “we do not have a mandate to take the country out of the eurozone,” an event that would follow a decisive rupture with creditors. Mr. Tsipras, who last week vowed never to succumb to creditors’ terms he condemned as the work of “extreme conservative forces,” seems to have calculated that it was worth making concessions in order to secure the proposed three-year $59 billion bailout loan and the possibility of negotiating easier terms for repayment of the nation’s massive debt. When Syriza began negotiations with creditors after it came to power in January, the objective was a more modest unblocking of about $8 billion from an existing bailout program that has since expired. “It is largely a capitulation on Tsipras’s part to what creditors have been asking for, but is that enough?” asked Raoul Ruparel, co-director of Open Europe, a research group in London. “Germany and some others are very skeptical about anything the Greeks produce, and this goes back to the main problem — a total lack of trust.” Yanis Varoufakis, a member of the Greek Parliament, before the meeting. Credit Thanassis Stavrakis/Associated Press Recent Comments illampu 2 minutes ago Lppk at Euclid Tsakalotos, how he explains the Greece position to the EU paliament:"Either you work like us or you work for us." Thomas Renner 20 minutes ago They sound nuts. How could anyone with a sound mind lend them money. On Sunday they voted not to except these terms. On Friday they are... illampu 20 minutes ago The French writer and diplomate Edmond About wrote already in 1858 that Greece is a failed and bankrupt country and would be a nightmare for... While President François Hollande of France welcomed the new Greek proposals as “serious” and “credible,” Chancellor Angela Merkel of Germany and her key ministers kept silent early Friday, insisting that it was too soon to judge the suggestions now being reviewed by the European Commission, the European Central Bank and the I.M.F. “We will wait until the institutions examine them and express their opinion,” said Steffen Seibert, a spokesman for the German government. But he reiterated Germany’s longstanding insistence that all 19 countries that use the euro must follow the rules, a position that has made Berlin resistant in the past to pleas from Greece that demands for tight budgets must be relaxed and debts restructured to prevent the country from suffocating. Martin Jäger, spokesman for Germany’s hard-line finance minister, Wolfgang Schäuble, said that the outcome of the Saturday gathering remains “completely open.” Both Mr. Schäuble and his boss, Ms. Merkel, have ruled out writing off any of Greece’s debt under what Ms. Merkel has called “a classical haircut,” or debt writedown, but they have indicated they might be open to further extending payment deadlines and reducing interest rates. Some of Ms. Merkel’s political allies and the governments of eastern and central European countries that have taken an even tougher line on Athens than Germany raised doubts Friday about Greece’s readiness and ability to deliver on its new promises, delivered late Thursday just before a midnight deadline fixed by creditors expired. Hans-Peter Friedrich, a member of the Christian Social Union, which is part of Ms. Merkel’s conservative bloc, expressed skepticism, noting the similarities between the new Greek proposal and the one rejected by the Greek people. Continue reading the main story 17 Comments “That means there are two possibilities, either the Greek government is tricking its own people, or us yet again,” Mr. Friedrich told Deutschlandfunk radio early Friday. But he said he had not yet seen the full Greek proposal and suggested he could be swayed. “We will see what the experts have to say,” Mr. Friedrich said. “And we will ask critical questions.” Also doubtful was Peter Kazimir, the finance minister of Slovakia, one of the countries that use the euro and whose previous government fell in 2011 over whether to support an earlier bailout deal with Greece. On his Twitter account on Friday, Mr. Kazimir said “it seems we have progress” on Greece but added: “One can only wonder how quickly a caterpillar can turn into a butterfly.” Liz Alderman reported from Greece and Andrew Higgins from Brussels. .James Kanter contributed reporting from Brussels, Niki Kitsantonis and Suzanne Daley from Athens, Alison Smale from Berlin and Rick Lyman from Warsaw. ============================ By Colin Freeman, Athens and Peter Dominiczak, Political Editor10:00PM BST 05 Jul 2015 The European Union is facing its worst crisis since the formation of the euro after Greece voted decisively against accepting the terms of its eurozone bail-out deal. Early results suggested that around 61 per cent of Greeks had voted to reject the deal, compared to just 39 per cent in favour, despite opinion polls saying right until the eve of polling that the result was too close to call. • Time to face reality: Greece needs mass debt relief now • Referendum gallery The scale of the No vote took European leaders by surprise, and led to panic in the financial markets. German Chancellor Angela Merkel spoke to Alexis Tsipras, the Greek prime minister, and is due to meet the French President, Francois Hollande. EU leaders have said that a “No” vote would see Greece crash out of the eurozone, dealing a sharp blow to Brussels' blueprints for closer European political and financial integration. The vote was hailed as a huge symbolic victory by backers of Greece's ruling Syriza party, whose coalition of radical Leftists came to power in January on a promise to fight Brussels-imposed austerity measures. The move sent shockwaves across Europe with financial markets braced for their worst period of turmoil since the height of the eurozone crisis three years ago. The scale of the 'no' vote became apparent early on David Cameron and George Osborne, the Chancellor, will hold an emergency meeting to discuss how to deal with the Greek crisis and ensure that Britain's economic recovery is not adversely affected. The Prime Minister is on Tuesday expected to attend a summit meeting of EU leaders in Brussels as they discuss how to prevent Greece's possible exit from the eurozone causing economic turmoil across the continent. • EU warns of Armageddon if Greek voters reject terms The Chancellor and Prime Minister have in recent weeks been holding regular meetings to discuss contingency plans in the event that Greece leaves the eurozone. Officials have been discussing measures to ensure that British ex-patriates in Greece, thousands of whom are pensioners, as well as UK tourists are protected. Mr Osborne has also repeatedly warned that the British economy will be hit if Greece leaves the eurozone. Unfortunately, Greece has chosen a path of isolation Hans Michelbach, political ally of Anglea Merkel Senior figures in the Government believe that it could strengthen Britain's negotiating hand ahead of the in-out referendum because the EU will be reluctant to risk losing another member if Greece leaves the bloc. However, there are fears that chaos in the EU if Greece leaves the eurozone could strengthen the hand of eurosceptics pushing for a British exit. In Athens, a festival atmosphere prevailed in front of the parliament in Syntagma Square following the result, with "No" campaigners blowing whistles and waving flags. • German TV crew pelted with 'fist-sized stones' by demonstrators in Greece EU leaders have already made it clear that a "No" vote would be interpreted not as a mandate for better bail-out conditions, but a message that Greece no longer wanted to be part of the eurozone. The country's banks, which are almost empty already, will collapse imminently unless the European Central Bank agrees to extend an emergency financial lifeline. Despite the possibly ruinous consequences of the vote, crowds celebrated on the streets Many ECB officials are reluctant to do so, given that the country is now effectively insolvent. But there are fears of empty shop shelves and hospitals running out of medical supplies if they do not. One Greek official warned of a "humanitarian disaster" if Greece's financial system was set adrift. The country's banks were shut all last week to prevent a run on the country's currency, and are due to reopen on Tuesday. Syriza officials are due to arrive in Brussels for what are likely to tense emergency talks with Eurozone finance ministers, who were infuriated by the party's decision to stage the referendum. • 'Buy this fund when Greece is no longer in the headlines’ While the Greek finance minister, Yanis Varoufakis, said that a deal could be hammered out within 24 hours, EU officials said that prospects of a new deal were far from clear. Several of Greece's creditor nations must also get any new bail-out agreement ratified by their parliaments, which may take a dim view of yet more taxpayer's cash being diverted to Athens. "Now one has to ask the question whether Greece would not be better off outside the euro zone," said Hans Michelbach, a German politician allied to the Chancellor, Angela Merkel. "Unfortunately, Greece has chosen a path of isolation." He said the "No" vote provided no further justification for an easing of Greece's bail-out conditions, a point backed by senior German business leaders last night. However, the Italian foreign minister, Paolo Gentiloni, appeared to argue for compromise. "Now it is right to start trying for an agreement again," he said. The landmark vote marked the culmination of the increasingly bitter five-year stand off between Greece and the demands of creditors in the eurozone and the IMF. Greece has decided emotionally, not logically. I am worried that our social fabric will disintegrate Greek political analyst Ioannis Michalatos It ended up being decisively resolved in just 12 hours flat, as voters from downtown Athens to remote Aegean islands returned a "No" verdict. For those Greeks who support the Left-wing Syriza government, the vote is a symbolic victory, even if does mean leaving the eurozone. For Yes voters, it is nothing short of disaster, dragging Greece into what they fear will be an even harsher economic wilderness than before.