Defiant PM rejects Grexit fears as he rallies 'No' vote

Greece's Prime Minister Alexis Tsipras got a rock-star welcome at an Athens rally on Friday as he sought to revive support for a "No" vote in a referendum called to strengthen his hand in talks with international creditors.

His typically charismatic turn on the stage came as the most recent polls suggested Sunday's plebiscite on Greece's latest bailout offer was too close to call, with the EU nation of 11 million people evenly divided.

Countering EU leaders' warnings that a "No" could cause Greece to crash out of the eurozone, Tsipras told the crowd of 25,000 cheering supporters: "We are not simply deciding to remain in Europe -- we are deciding to live with dignity in Europe.

"I call on you to say 'No' to ultimatums and to turn your back on those who would terrorise you," the 40-year-old leader said. "No one can ignore this passion and optimism."

Just 800 metres away, separated by police with riot shields, a rival rally of 20,000 "Yes" supporters shouted pro-European slogans and voiced fears of a so-called "Grexit" from the eurozone if Tsipras got his way.

"They cannot pretend any longer that it's not about leaving the euro," said a 43-year-old doctor who gave his first name as Nikos. "Outside the euro lies only misery."

"It cannot go on like this. Our government is a liability," said George Koptopoulos, a 70-year-old retired university professor.

Many Greeks have jumped into the "Yes" camp since capital controls were imposed this week limiting daily ATM withdrawals to just 60 euros ($67) after Greece's international aid package ran out on Tuesday.

Adding to the sense of crisis, a eurozone emergency fund officially declared Greece to be in default on Friday for not making a 1.5-billion-euro payment to the International Monetary Fund this week.

- Declared default -

Greece's single biggest creditor, the European Financial Stability Facility (EFSF) said, however, it was not yet demanding immediate repayment of loans worth 145 billion euros.

The two latest voter intention polls showed growing support for a "Yes" compared to previous surveys.

An Alco institute poll Friday found 44.8 percent of Greeks intend to vote "Yes" and 43.4 percent are for "No", while a Bloomberg survey for Greece's Macedonia University showed 43 percent would vote "No" and 42.5 percent "Yes".

Greece's top administrative court ruled late Friday the referendum could go ahead after rejecting a challenge by two citizens who argued its question was confusing and unconstitutional.

Tsipras says the vote is needed to force creditors to finally accept his key demand of another round of debt relief to save Greece from financial meltdown and possibly crashing out of the euro.

Greece, he says, needs to trim its suffocating 323-billion-euro debt burden by having creditors forgive 30 percent of what they are owed and allowing a 20-year grace period for repaying the rest.

Greek Finance Minister Yanis Varoufakis has promised banks would reopen on Tuesday if a new deal is agreed quickly. The Union of Greek Banks said Friday its members had enough liquidity until then.

But European Commission chief Jean-Claude Juncker warned in Brussels that Greece's negotiating position, far from being strengthened, would be "dramatically weakened" in the event of a "No" -- and still difficult even in the event of a "Yes" vote.

German Finance Minister Wolfgang Schaeuble, known for his tough line against Athens's leaders, said it was clear Greece's leftist leaders did not really want any reform programme.

"Only the Greeks" can now decide if they want to stay in the eurozone, he told German daily Bild, adding that "one thing is clear: we will not abandon the Greek people".

On Greece's streets, the cash rationing has led many to despair, especially pensioners who have been allowed a one-off over-the-counter withdrawal of 120 euros if they don't have a bank card.

In the second-biggest city of Thessaloniki, one 77-year-old man unable to withdraw his money crumpled to the ground, scattering his papers.

"I am a sensitive person," the man, George Chatzifotiadi, explained later to AFP. "I cannot stand to see my country in this situation."

In Athens, another pensioner, Kostas, has been regularly withdrawing his and wife's daily euro limits for fear they might be seized by the government or converted to drachmas, Greece's pre-euro currency.

"My money is safer at home," he said.

- Confusing question -

Ahead of the referendum, though, the question being put to Greek voters has stumped many.

It reads: "Should the deal draft that was put forward by the European Commission, the European Central Bank and the International Monetary Fund in the Eurogroup of June 25, 2015, and consists of two parts, that together form a unified proposal, be accepted?

"The first document is titled 'Reforms for the Completion of the Current Programme and Beyond' and the second 'Preliminary Debt Sustainability Analysis'."

Eurozone officials have firmly said that the "deal" referred to in the question expired on Tuesday.

Europe's main stock markets slipped lower Friday as all eyes turned to Greece's referendum and what that might mean to investors at the beginning of next week. The risk of contagion to other eurozone nations, however, appeared remote.

The consensus among analysts was that, either way, the referendum's result would likely not change much in the talks.

Holger Schmieding, chief economist at Germany's Berenberg bank, warned however that "a Greek 'No' could turn into a tragedy for Greece -– but it would not be a significant threat for the eurozone".

Finance minister Varoufakis on Saturday, meanwhile, slammed a Financial Times report that suggested Greek savers could lose 30 percent of their bank deposits to shore up their country's banking system as a "malicious rumour".

The British business daily, quoting unidentified bankers and businessmen close to negotiations, reported that Greek depositors with over 8,000 euros ($8,900) in an account may be force to take a "haircut".
Source: AFP