Greeks began voting in a referendum on Sunday that presents the biggest challenge to the running of the euro since its adoption and risks sending shock waves through the world’s financial markets.
The nationwide ballot was taking place at the end of a week of unending dramathat saw Greece close its banks, ration cash, fail to repay the IMF and lose billions of euros when its bailout programme expired. The vote is on the last terms offered to Greece before its prime minister, Alexis Tsipras, abandoned talks with his country’s lenders last weekend, saying their conditions would only exacerbate the plight of a country whose economy has already shrunk by a quarter.
At a rally in the centre of Athens on Friday night, Tsipras urged his compatriots to cast a no ballot, assuring them it would not be a vote for leaving the euro, but for remaining in Europe “with dignity”. Greece’s creditors and most of the opposition parties have claimed that, on the contrary, it could lead to exit from the single market (“Grexit”) and even the European Union.
Almost 9.9 million Greeks have the right to vote in the referendum, which the interior ministry said would cost less than half the amount spent on the general election in January that brought Tsipras’s Syriza party into office in a coalition with the populist, nationalist Anel party.
Among the many imponderables was the impact of votes cast by Greeks living abroad. Under the same rules that govern elections, expatriates must return to the country if they are to cast valid ballots. There was evidence that large numbers of Greeks living abroad were coming back for the referendum and that most leaned towards voting yes.
The prime minister’s decision to call the vote prompted outrage among opposition politicians who favour a yes vote. They have argued that the offer on which the referendum is based was withdrawn when the bailout programme ran out and that Syriza has rigged the ballot by putting both options on one ballot sheet with the no option first. But a claim that the vote was unconstitutional was thrown out by Greece’s highest court on Friday.
Polling stations will be open from 7am local time until 7pm (5pm British summer time). The first results are expected around 9pm.
Opinion polls have given contradictory results and none has shown a clear majority for either option. But they have all shown an overwhelming majority of Greeks – around three-quarters – want their country to keep the euro.
A no vote is supported by both the parties in government and the neo-NaziGolden Dawn party. The centre-right opposition New Democracy party has campaigned for a yes vote as have Pasok and To Potami, both of the centre-left.
In a surprise development on the eve of polling, the German finance minister, Wolfgang Schäuble – until now even more of a hardliner than his chancellor, Angela Merkel – turned a more conciliatory face towards Greece. Having previously insisted that a no vote on the lenders’ last terms would see their country forced out of the euro, Schäuble told the Bild newspaper that the choice before them on Sunday was between holding on to the euro and being “temporarily without it”. It was far from clear what Schäuble had in mind, but economists have mooted the notion of a period in which Greece might go back to its national currency, the drachma, while its economy recovered.
With pharmacists in Athens reporting that the government had rationed the distribution of drugs, and fears being raised of food shortages within weeks, the finance minister of Europe’s biggest economy said: “It is clear that we will not leave the [Greek] people in the lurch.” Schäuble’s last-minute intervention appeared to favour the no camp’s argument that the vote is not on membership of the euro.
The German minister’s tone was strikingly at odds with that of his charismatic but controversial Greek counterpart, Yanis Varoufakis, who turned up the heat before the ballot by accusing Greece’s creditors of terrorism.
“Why did they force us to close the banks?” he asked in an interview published by the Spanish daily El Mundo. “To instil fear in people. And spreading fear is called terrorism.”
Rallies in support of Greece were held in several European capitals on Saturday. Others were also held in Britain: in London, Liverpool and Edinburgh.
Several economists warned that financial markets were underestimating the risks of a no vote – and even of a yes vote. In a reference to the 2008 collapse of Lehman Brothers – the spark that detonated global recession – Megan Greene, chief economist of the Canadian asset management firm Manulife, said: “Grexit would be a Lehman-type event, but with a much slower fuse.”