Anxious pensioners swarmed closed bank branches Monday and long lines snaked outside ATMs as Greeks endured the first day of serious controls on their daily economic lives ahead of a referendum that could determine whether the country has to ditch the euro currency and return to the drachma. Greek Prime Minister Alexis Tsipras was defiant, urging voters to reject creditors’ demands, insisting a “No” vote in next Sunday’s referendum would strengthen Athens’ negotiating hand.
“We ask you to reject it with all the might of your soul, with the greatest margin possible,” he said on state television. “The greater the participation and the rejection of this deal, the greater the possibility will be to restart the negotiations to set a course of logic and sustainability.”
Greece’s bailout program ends Tuesday, when the country is unlikely to make a 1.6 billion euro ($1.8 billion) repayment to the International Monetary Fund. But Athens and creditors from the IMF and the eurozone failed to agree on the terms of an extension. Tsipras called the referendum over the weekend, arguing that demands for tougher austerity measures could not be accepted after six years of recession. The move shook world markets, saw Greek borrowing rates skyrocket, and set off a credit downgrade further into junk status from Standard & Poor’s rating agency, which said it now sees a 50-percent chance of Greece leaving the eurozone. By Tuesday in Asia, stock markets were recouping some of the previous day’s losses but remained jittery. That has stoked fears of a crippling bank run, a messy Greek debt default and an exit from the euro.