Tense Europe awaits Greek voters' bailout decision

GMT 14:16 2015 Sunday ,05 July

Arab Today, arab today Tense Europe awaits Greek voters' bailout decision

German Chancellor Angela Merkel (L)
Berlin - AFP

German Chancellor Angela Merkel and other EU leaders awaited with trepidation the outcome of a referendum in Greece Sunday that is already dividing opinion in Europe and could even shape its future.

After months of fruitless talks with its creditors, Greece's dramatic bid to place a bailout decision in the hands of its people will have an impact far beyond the heavily-indebted country's borders, analysts warn.

"Fateful election", "Nightmare of bankruptcy", "No-one's winning", "Hardship in Greece", "Greek troops and police prepare for street battles" -- the crisis grabbed front-page headlines and appeared to galvinize people around Europe.

The closely fought vote on whether to support the terms of Greece's potential bailout deal with its international creditors is an indicator for future negotiations, said Julian Rappold of the German Council on Foreign Relations.

With fears a 'No' vote could lead to Greece exiting the eurozone -- a so-called "Grexit" -- Pawel Tokarski of the German Institute for International and Security Affairs said its impact would reach much further.

It will "determine the future trajectory of European integration," he said.

Merkel, seemingly sanguine last week in remarking that Europe could "calmly" await the result of the referendum because the bloc was "strong", has been at the forefront of efforts to resolve the crisis.

Now, the head of Europe's biggest economy is "faced with a dilemma", Rappold said.

If Greece were to leave the euro, it would signify the failure of Europe's crisis management that Merkel has championed though years of economic turbulence.

"She would not like it to be said that she pushed Greece out of the euro," Rappold added.

She also fears unforeseen economic consequences, a boost for anti-euro groups in some countries and that a 'No' vote would be seen as a sign of weakness by nations such as Russia or China, he added.

But if Greek voters defy Tsipras and vote 'Yes', Merkel must win parliamentary approval for negotiations on a new aid programme for Greece amid growing dissent within her conservative party on the Greece issue.
She would also have to win over a bailout-weary public tired of picking up the lion's share of the bill.

- 'Nein', 'Oxi' -

But the referendum is not just dividing Greeks.

In the Latvian capital, Riga, Karlis Muiznieks, 27, a researcher at the University of Latvia, said a united, friendly eurozone was the best option.

But he conceded: "I think the Greeks are acting quite logically."

Inese Berziņa, a 50-year-old school security guard, however, called the Greek crisis "a double-edged sword".

"If we don't give money to (the) Greeks, they will turn to Russia, and I don't want that. But if we do give them money, they'll never give it back."

German Social Democrat lawmaker Gabriela Heinrich said she hoped the Greeks would send a "commanding sign for Europe because they are... a firm part of the European community of states".

Germany's Bild mass-market daily, which has taken a tough line with Athens since the start of the crisis, asked whether a Grexit would "really be such a drama".

Thousands of Greece supporters have rallied in Barcelona, Paris, Dublin and Frankfurt, while in Spain, allies of Greece's Syriza party see the vote as an historic opportunity to change Europe.

And if Italians were called to vote like the Greeks, 51 percent would support tough measures imposed by Europe to avoid crashing out of the euro, a recent Ipsos poll showed.

- Different interpretation -

European Central Bank chief Mario Draghi will also be dreading a 'No' vote and is in "an extremely difficult situation", Tokarski said.

Through its emergency funding, the ECB is keeping Greek banks afloat. If it were to stop these loans, it would risk pressing the "Grexit" button -- a decision its chief wants to leave to the politicians.

Athens argues that the referendum is about saying 'No' to new austerity measures proposed by creditors in return for aid.

But this proposal has in the meantime expired, leaving others to interpret the referendum as a vote for or against the euro.

"Whatever the result, it will be interpreted differently by political forces in Greece and in the eurozone," Tokarski warned.


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