5 July 2015

23:30 – Wrapping it all up

Time to wrap this live blog up. Over 95% of votes have been counted. NO is on 61.3%, YES is on 38.7% – with turnout at 62.5%.

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Reactions to the results have been mixed. It is clear that Tsipras now wants to return to the negotiating table in light of the stronger mandate he just got from Greek voters. However, he will find some tough interlocutors – Germany, of course, but also the Baltics and Slovakia (see below). Other Eurozone countries – notably Italy and France – will likely be more willing to resume talks and listen.

Eurozone leaders will hold an emergency summit on Tuesday evening. Before that, the ECB will tomorrow have to decide whether to maintain emergency funding for Greek banks.

Whatever happens from now on, the Eurozone is facing a defining moment. If you haven’t done so already, you can read a snap analysis of the referendum results by our Co-Director Raoul Ruparel here.

And that was it from us for today. Καληνύχτα/Good night!

23:10 – Dijsselbloem: Referendum outcome “very regrettable” for Greece’s future

Eurogroup Chairman Jeroen Dijsselbloem has also put out a short (and pretty tough) statement. Here it is:

I take note of the outcome of the Greek referendum. This result is very regrettable for the future of Greece. For recovery of the Greek economy, difficult measures and reforms are inevitable. We will now wait for the initiatives of the Greek authorities. The Eurogroup will discuss the state of play on Tuesday 7 July.

Eurogroup Chairman Jeroen Dijsselbloem, 5 July 2015

23:01 – A couple of busy Eurozone days ahead

As we wait for the final results of the Greek referendum to come in, here’s an overview of all the meetings/conference calls expected to take place over the next two days:

Monday

  • Meeting of Eurogroup Working Group (officials from the finance ministries of Eurozone countries)
  • ECB Governing Council to decide on emergency funding for Greek banks (ELA)
  • Conference call between European Commission President Jean-Claude Juncker, ECB President Mario Draghi, European Council President Donald Tusk and Eurogroup President Jeroen Dijsselbloem
  • Juncker to consult with all Eurozone leaders
  • Tsipras to meet all Greek party leaders to discuss next steps
  • Hollande-Merkel dinner in Paris

Tuesday

  • Meeting of Eurozone finance ministers
  • Emergency summit of Eurozone leaders

It is going to be intense.

22:49 – Eurozone finance ministers to meet on Tuesday

Eurozone finance ministers will also meet on Tuesday, ahead of the emergency summit of Eurozone leaders. This is normal procedure, as the Eurogroup is supposed to do the preparatory work for meetings of Eurozone leaders.

Here’s the tweet by Eurogroup Chairman Jeroen Dijsselbloem’s spokesman:

22:30 – Counting coming to an end, ‘No’ remains over 61%

Almost 92% of votes have now been counted. NO is on 61.35%, YES is on 38.65% – with turnout at 62.3%. NO is on course to win in all Greek districts. That’s what you call a landslide.

Here’s a screenshot from the website of the Greek Interior Ministry:

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22:25 – Italian Foreign Minister: It is “right” to resume talks with Greece

Italian Foreign Minister Paolo Gentiloni has just tweeted that “it is now right to start again to look for an agreement. But one doesn’t get out of the Greek labyrinth if Europe is weak and without growth”.

22:15 – Juncker to talk to all Eurozone leaders tonight and tomorrow

The European Commission has just put out a short (and rather dry) statement.

Here goes:

The European Commission takes note of and respects the result of the referendum in Greece. President Juncker is consulting tonight and tomorrow with the democratically elected leaders of the other 18 Eurozone members as well as with the Heads of the EU institutions. He will have a conference call among the ‘Euro-Institutionals’ (with the President of the Euro Summit, the President of the Euro Group and the President of the European Central Bank) on Monday morning. He intends to address the European Parliament in Strasbourg on Tuesday.

European Commission, 5 July 2015

Perhaps the most interesting bit is the reference to “the democratically elected leaders of the other 18 Eurozone countries” – a reminder to Tsipras that he is not the only one with a democratic mandate.

22:10 – Schulz: Humanitarian programme for Greece needed immediately

European Parliament President Martin Schulz has just told the press that a humanitarian programme for Greece should be discussed as of tomorrow.

22:05 – CDU Vice-Chairman: ECB should forbid further emergency liquidity for Greek banks

Michael Fuchs, the Vice-Chairman of Angela Merkel’s CDU/CSU party, has just told German TV channel ZDF that, according to him, the ECB should cut off emergency liquidity for Greek banks.

As we explained here, such a move would precipitate a Greek euro exit.

21:55 – Eurozone leaders to hold emergency meeting on Tuesday

European Council President Donald Tusk has just tweeted that an emergency meeting of Eurozone leaders will take place in Brussels on Tuesday evening. German Chancellor Angela Merkel and French President François Hollande had requested this meeting earlier this evening.

21:43 – Tsipras to meet all Greek party leaders to discuss next steps

Greek Prime Minister Alexis Tsipras has just given a speech. He said he will hold talks with the leaders of all Greek opposition parties in order to discuss the next steps. He also stressed that Greece wants debt relief to be on the table when negotiations with creditors resume.

A few highlights:

21:35 – Lithuanian President: Situation “gets even more complicated”

It was the only Baltic country missing. We now also have a first reaction from Lithuania. President Dalia Grybauskaitė, usually pretty hawkish, has struck a more cautious tone this time around:

A reminder of what she tweeted ahead of the emergency meeting of Eurozone leaders on 22 June:

21:27 – Slovak Finance Minister “disappointed” by Greek referendum results

Slovak Finance Minister Peter Kažimír has just taken to Twitter to voice his “disappointment” with the outcome of the Greek referendum. He warns that a Greek euro exit now “seems like a realistic scenario”.

Interesting days ahead, no doubt.

21:24 – Hollande and Merkel want emergency summit of Eurozone leaders on Tuesday

It is being reported that German Chancellor Angela Merkel and French President François Hollande want an emergency meeting of Eurozone leaders to take place on Tuesday. We already knew the two are going to discuss the outcome of the Greek referendum over dinner in Paris tomorrow.

21:15 – Samaras steps down as party leader

News coming in at great speed right now. Antonis Samaras, former Greek Prime Minister, has just resigned as leader of the centre-right New Democracy – the largest opposition party in the Greek parliament.

21:11 – Estonian Prime Minister: Communism does not work

As expected, Baltic states are among the toughest in their reaction to the outcome of the Greek referendum. Estonian Prime Minister Taavi Rõivas has just tweeted the following in an exchange with Guy Verhofstadt. The two are members of the same political family at the EU level, the liberal ALDE group.

Yesterday, Rõivas had also tweeted that a ‘No’ vote in the referendum meant “No to the euro”.

21:05 – Latvian Foreign Minister: Outcome of Greek referendum “will have consequences for all”

Edgars Rinkēvičs, the Foreign Minister of Latvia, has just tweeted the following:

21:02 – German Vice-Chancellor: Last bridges between Greece and Europe “torn away” by ‘No’ vote

German Vice-Chancellor Sigmar Gabriel has made some tough comments in an interview to be published by Tagesspiegel tomorrow. He said “the last bridges between Greece and Europe will have been torn away” in case of a ‘No’ victory (which now looks certain).

20:55 – Raoul Ruparel: Greek referendum marks “a profound change” for Europe

Our Co-Director Raoul Ruparel has just published his instant reponse to the Greek referendum results. He essentially outlines three scenarios – in order of likelihood:

  1. Grexit (either with or without new negotiations)
  2. New negotiations leading to a deal
  3. Greece remaining in a limbo

He concludes:

This is a profound change. Possibly the first in the five years of crisis. The Eurozone will either have to capitulate to Greece, in turn changing its entire modus operandi and probably unleashing the first fiscal transfer between states via a write off of Greek debt. Or Greece will have to leave the Eurozone. In which case the EU and the Eurozone will be fundamentally changed. The EU will have to reconsider its ‘ever closer union’ mantra and accept that its flawed approach and inflexible institutions have helped precipitate the downfall of one of its guiding principles. The Eurozone will need to set out a clearer path for its future and make the case, in concrete policy terms, for why other countries will not be next. This will likely mean moving towards deeper integration and a significant intervention from the ECB to stem any market concerns.

For Greece the outcome is unlikely to be positive for the economy in the short term. Even if negotitiations take place they will take some time and capital controls will likely still be needed pushing it further into depression. If there is a Grexit the transition would be painful but longer term prospects may be better. That said, its not clear that a Syriza led government would use the time and space afforded by a devaluation to reform the economy and make it more competitive and business friendly as is needed.

You can read Raoul’s full analysis here.

20:34 – Varoufakis: Greek voters have handed the ultimatum back to creditors

Greek Finance Minister Yanis Varoufakis has just finished speaking to the press. A few highlights from Greek tweeps:

Since his outfits tend to draw quite a bit of attention, it is worth noting that Varoufakis gave his statement wearing a T-shirt.

20:29 – Polish Prime Minister says euro exit only option left for Greece

Polish Prime Minister Ewa Kopacz says that, in light of the results coming in, Greece only has one option left: leaving the Eurozone.

20:26 – Results update: ‘No’ over 61%

Time for an update on the results. With nearly 60% of votes counted, ‘No’ is on 61.3% and ‘Yes’ is on 38.7%. Turnout is over 60%, according to data from the Greek Interior Ministry.

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20:18 – Celebrations kicking off in Greece

Celebrations are kicking off in Greece. The image below is from Greek public broadcaster ERT and shows a rally of ‘No’ supporters. You can spot a few flags of L’altra Europa con Tsipras – the Italian political movement that supported Greek Prime Minister Tsipras in the race for European Commission President last year.

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20:00 – Leader of Socialist MEPs calls for negotiations to resume tomorrow

Italian MEP Gianni Pittella, the leader of the centre-left S&D group in the European Parliament, has just put out a statement saying,

As of tomorrow, let’s reopen the negotiations inspired by a new attitude of solidarity and cooperation, taking into account the difficult social dimension in Greece. We expect the Greek government to come back to the negotiations with a renewed responsible attitude. It will also be time for some member states and ministers to stop with unacceptable rigidity, national selfishness and domestic political games.

Gianni Pittella MEP, 5 July 2015

We wonder whether Manfred Weber, the CSU MEP who leads the centre-right EPP faction, agrees.

19:47 – A big victory of the ‘No’

Greek TV channels continue to follow the latest developments live (just as we are). The grey banner across the screen on SKAI says, “A big victory of the NO”. That’s indeed how it’s looking.

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19:39 – Podemos watching the results with great attention

Spain’s anti-establishment party Podemos, a close ally of SYRIZA, is no doubt among those looking at the Greek referendum results with great attention. Pablo Echenique, a leading member of the party, has just tweeted, “The Greek brothers are telling financial dictators that one doesn’t play with democracy and dignity”.

19:35 – ‘No’ victory looking increasingly likely

Nearly 41% of votes have now been counted. ‘No’ maintains a clear lead with over 61% and remains ahead in all Greek districts. Fair to say the final outcome is now unlikely to change, although the percentages may vary.

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19:27 – More German reactions: CSU pulling no punches, Die Linke celebrating

Andreas Scheuer – the General Secretary of the CSU, Angela Merkel’s Bavarian sister party – has just reacted to the results coming in from Greece. Unsurprisingly, his words weren’t soft.

On the other side of the German political spectrum, SYRIZA’s ally Die Linke is in a far better mood:

19:11 – Marine Le Pen: The peoples are back

Front National leader Marine Le Pen hails the ‘No’ victory that is shaping up in the Greek referendum and describes it as “a beautiful and great lesson of democracy”. “The peoples are back”, she just tweeted.

Le Pen has repeatedly said that she is planning to hold a referendum on France’s membership of the euro and the EU if she is elected French President in 2017.

19:04 – Official projection: NO 61%, YES 39%

The official projection from the Greek Interior Ministry is out, and it foresees a clear ‘No’ victory with 61% of votes. Meanwhile, counting continues and ‘No’ remains ahead in all Greek districts. Nearly 30% of votes have been counted so far.

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Some snap analysis coming soon, so stay tuned.

18:48 – Bank of Greece to request additional emergency funding for Greek banks

Greek government spokesman Gabriel Sakellaridis has told TV channel ANT1 that the Bank of Greece will tonight request an increase in the ceiling on emergency funding for Greek banks via the Emergency Liquidity Assistance (ELA) facility. Here’s the full story via Spanish news agency EFE.

In case of a ‘No’ victory, we wouldn’t expect an enthusiastic reaction from the ECB.

18:37 – Counting proceeding quickly, ‘No’ still firmly in the lead

Nearly 20% of votes have already been counted. According to the website of the Greek Interior Ministry, ‘No’ is ahead with over 60% of votes. Turnout is nearing 57%, well above the 40% needed in order for the referendum to be valid.

18:30 – First reactions from Germany

First reactions coming in from Germany. Carsten Schneider – the budgetary policy spokesman of the SPD, Angela Merkel’s coalition partner – says he doesn’t know whether it will be possible to find “common ground” with the Greek government.

18:25 – ‘No’ ahead in all districts

Counting is underway. According to the website of the Greek Interior Ministry, ‘No’ is currently ahead in all districts. This with nearly 12% of votes counted.

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18:20 – Greek Interior Minister: “This has been a great democratic effort”

Greek Interior Minister Nikos Voutsis has just made a short press statement. He said we should get a first result at 7pm UK time.

18:12 – First official results: NO 59.8%, YES 40.2%

The first official results have appeared on the website of the Greek Interior Ministry. NO is ahead with 59.8%, YES is on 40.2%. However, only 7.8% of votes have been counted. Still a long way to go.

18:05 – Greek government spokesman: Negotiations must resume and be concluded “very soon”

Greek government spokesman Gabriel Sakellaridis has said Greece wants to resume talks with the country’s creditors and wrap up a deal quickly. Reuters quotes him as saying,

The negotiations which will start must be concluded very soon, even after 48 hours.

Greek government spokesman Gabriel Sakellaridis, 5 July 2015

As we explained here, he may be way too optimistic.

18:00 – Eurozone officials to meet tomorrow whatever the outcome

It seems that the Eurogroup Working Group (EWG) of Eurozone officials will hold a meeting in Brussels tomorrow whatever the outcome of the Greek referendum.

17:50 – What would a ‘No’ vote in the Greek referendum mean?

Useful reminder of what a ‘No’ vote in the Greek referendum would mean. This is what our Co-Director Raoul Ruparel wrote on our blog on Friday:

What would a ‘No’ vote mean?

It is very hard to see this as anything but a vote for Grexit. Whatever offer is voted on or whatever is seen to be voted on, there is no doubt that this is a ‘take it or leave it’ offer. It seems very unlikely that in the event of a ‘No’ vote the creditors would produce a different offer. If they did it would surely be a significant dent to credibility.

The exact process towards Grexit is far from clear. However, in the event of a ‘No’ vote, the ECB would likely have to cut off the ELA to Greek banks. This could be done a number of ways either by significantly capping the level available (down to €500m) or by significantly increasing the collateral needed to borrow under ELA. This would eventually precipitate the need for Greece to begin printing/creating its own currency to help fund Greek banks and avert a financial collapse. Theoretically, Greece could live in a limbo inside the euro with capital controls in place and some kind of parallel currency circulating. But the question we have to ask is: why?

In the end, living in such limbo would be incredibly painful for the Greek economy. Furthermore, it would mean doing so without a clear end game in sight. Unless this situation is simply buying time for a new government to come into place and resume some kind of bailout with the creditors then there seems to be little benefit. As such, a ‘No’ vote would probably precipitate a Grexit.

We also believe it is likely and possible that Greece exits the Eurozone but stays within the EU. This would be to the advantage of all involved to minimise the economic pain for Greece and to maintain geopolitical and social stability in the country. However, a Grexit would probably require changes to the EU treaties to ensure legal certainty for the new Greek currency, to allow for a clear devaluation and to allow Greece to set up the necessary economic institutions (such as a central bank) outside the Eurosystem. As we suggested back in 2012, this could be done using the ‘flexibility clause’ (Article 352) in the EU treaties in the short term with a full treaty change used in the medium to longer term to clear up the number of uncertainties the event would raise.

On top of this, it is likely that Greece would need technical expertise to aid its transition but also financial aid. The banks would have to be restructured and recapitalised, which the government cannot afford to do and there is little in terms of liabilities to bail-in. The newly separate Bank of Greece would need assistance from the ECB and IMF to help manage its new currency, not least because it may not have significant foreign exchange reserves.

17:45 – Varoufakis has a go at “toxic” media

Greek Finance Minister Yanis Varoufakis has just taken to Twitter to clarify that he never predicted that Greece would strike a deal with creditors within 24 hours of the referendum. He blames “toxic” media for misquoting him.

17:40 – Where to look for official results

As we said, the first projections are expected at around 7.30pm BST. Official results will be published on the website of the Greek Interior Ministry as they come in (click here).

17:25 – Merkel and Hollande to discuss referendum outcome in Paris tomorrow

A number of meetings are already being planned to discuss the outcome of the referendum. Greek Finance Minister Yanis Varoufakis will meet Bank of Greece Governor Yannis Stournaras tonight. The ECB Governing Council is to hold a conference call either late tonight or tomorrow morning. German Chancellor Angela Merkel will travel to Paris tomorrow to hold talks with French President François Hollande over dinner, the French President’s office has just announced.

17:20 – First projections expected in no less than two hours

All the final opinion polls have ‘No’ in the lead. It may well be a very tight result. Instant thoughts from Open Europe Co-Director Raoul Ruparel:

Remember: the first projections based on official results are expected to be published at around 7:30pm UK time.

17:15 – All opinion polls from today have ‘No’ in the lead

Greek TV channels have started broadcasting opinion polls from today. Note that none of them are exit polls. All of them have ‘No’ in the lead. The summarising table below is from Greek state broadcaster ERT.

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16:55 – Varoufakis: What creditors are doing to Greece is terrorism

Polls are about to close in Greece. Before the first exit polls start coming in, a reminder of the inflammatory remarks Greek Finance Minister Yanis Varoufakis made in an interview with Spanish daily El Mundo yesterday,

What they are doing with Greece has a name: terrorism…Why did they force us to close banks? To instil fear into the people. And when it is about spreading fear, that phenomenon is called terrorism. But I’m confident that fear won’t win.

Greek Finance Minister Yanis Varoufakis, 4 July 2015

16:45 – Welcome to Open Europe’s Greek referendum live blog

Welcome to Open Europe’s coverage of today’s referendum in Greece. There are a number of live blogs running today, but our focus will be not just to cover the situation in Greece but also the reactions from across Europe in a number of languages.

For our analysis of what the different outcomes would mean for the future of Greece and the Eurozone, see here.

Polls will be closing at 5pm BST. Greek daily Kathimerini is reporting that turnout should be close to the one registered in January’s general election – i.e. around 64%. This is well above the 40% needed to make the referendum valid. Exit polls are expected straight after the polls shut, although exactly when is not clear. They will not be traditional exit polls, according to reports, but telephone polls conducted today on voting intentions and how people voted.

As we have noted before, European politicians haven’t been shy about wading into the Greek referendum debate. Here is a selection of quotes from the past few days:

Eurogroup Chairman Jeroen Dijsselbloem told Dutch MPs last week,

One illusion must be swept from the table: that if the outcome is negative then everything can be renegotiated and you will end up with an easier and more attractive package…If people say they don’t want that, there is not only no basis for a new programme, there is also no basis for Greece in the Eurozone.

Eurogroup Chairman Jeroen Dijsselbloem, 2 July 2015

German Finance Minister Wolfgang Schäuble told Bild in an interview yesterday,

With the euro or temporarily without it: only the Greeks themselves can answer this question…It is also clear that we won’t leave people in Greece in the lurch.

German Finance Minister Wolfgang Schäuble, 4 July 2015

European Council President Donald Tusk was less categorical, as he told Politico in an interview published on Friday,

It’s very clear that the referendum is not…about being in the Eurozone or not. No, in fact, nobody’s interested – I hope nobody’s interested – in this kind of choice.

European Council President Donald Tusk, 3 July 2015

Interestingly, he also added,

If we need some legal treaty changes to save Europe, it’s also possible to discuss.

European Council President Donald Tusk, 3 July 2015

However, European Parliament President Martin Schulz told Deutschlandfunk (in an interview that was broadcast today but had been recorded last week),

Is Greece still in the euro after this referendum? That is certainly the case, but if they say ‘No’ they will have to introduce another currency after the referendum because the euro is not available as a means of payment.

European Parliament President Martin Schulz, 5 July 2015

French Economy Minister Emmanuel Macron used some strong words as he told a conference today,

Even if the ‘No’ were to win, it will be our responsibility not to make a Versailles Treaty of the Eurozone.

French Economy Minister Emmanuel Macron, 5 July 2015

He later told BFM TV,

It is evident that the response to a Greek ‘No’ can’t be an automatic [euro] exit. France will work on the construction of a compromise that wasn’t that far.

French Economy Minister Emmanuel Macron, 5 July 2015

Spanish Prime Minister Mariano Rajoy said today,

Whatever the outcome of the referendum, the future won’t be easy. It would no doubt be better if ‘Yes’ won but, even so, the future won’t be easy…The euro is not, and can’t be, a club à la carte. It has norms and rules that ensure its own survival.

Spanish Prime Minister Mariano Rajoy, 5 July 2015

These quotes tell an interesting story, though. There are clearly significant splits both between countries in the Eurozone (France is less hawkish than most) and between EU institutions. This will make post referendum negotiations harder no matter the outcome. However, particularly in the case of a No. The message from many in the Eurozone has been that a No will amount to a Grexit. But clearly this is not a message which all agree on. So while some may not want to continue to negotiate with Greece after a No, it is possible that some countries or institutions will. How exactly this would be handled is unclear, but with such division bringing forward any new proposals would still be nearly impossible. As we have noted before, it will likely come down to the action of the ECB.