In a surprise development last night, Greek Finance Minister Yanis Varoufakis announced his resignation, a move which could change the tone in negotiations with creditors. The key will be who Tsipras chooses as a replacement, it has to be someone seen as creditable and who negotiates seriously and delivers on promises. Varoufakis said he was told that some creditors would prefer he not attend the ministers' meetings. He said Tsipras had judged it "potentially helpful to him" if he absented himself. "I shall wear the creditors' loathing with pride."
Earlier German Economy Minister and Vice-Chancellor Sigmar Gabriel had said: "Tsipras and his Government are leading the Greek people down a path of bitter abandonment and hopelessness". Tsipras had "torn down the last bridges on which Greece and Europe could have moved towards a compromise".
In the referendum the "No" camp won by 61 per cent to 38 per cent. Six million Greeks voted, or 62.5 per cent of eligible voters. The result was hailed by leaders of parties that oppose austerity or loss of national sovereignty at the expense of European integration. "Today in Greece democracy won," tweeted the head of Spain's leftist Podemos party, Pablo Iglesia, who is a Tsipras ally. The head of France's far-right National Front, Marine Le Pen, described the outcome as a "No for freedom, for revolt against European diktats which want to impose the single currency at any price".
A Franco-German summit will be held in Paris today and a summit of Eurozone countries in Brussels tomorrow. The plebiscite had been announced just over a week earlier, after Tsipras walked out of talks over terms for another 1.6 billion ($2.65 billion) in bailout funds by July 1. He predicted a "No" vote would cause lenders to ease demands for economic and welfare reform and instead reschedule Greece's crippling 320 billion debt.
But the creditors - the European Commission, the International Monetary Fund and other members of the Eurogroup, whose countries share the euro - are in no mood for lenience. Many negotiators have no trust in Tsipras, whom they blame for months of delay and grandstanding. Scepticism runs deep in Germany, which has lent Greece tens of billions of euros in the name of European solidarity, and in Ireland and Spain which took their austerity medicine. Many eyes are on the European Central Bank, which holds the lifeline to the Greek banking system. Without its support, Greece's economy may swiftly collapse. A "No" vote means Greece "would have to introduce some other currency, because the euro is not available as a means of payment," said the president of the European Parliament, Martin Schulz. "How do they intend to pay salaries? How do they intend to pay pensions?"
- additional reporting AP
Q & A: What does the vote mean for Greece and Europe?
What does a "no" vote mean for Greece?
The vote endorses the Syriza Government's rejection of the austerity-debt refinancing deal proposed by the EU. Leftist opponents of "austerity economics" across Europe will rejoice, as will critics of the EU's bureaucracy. EU governments will be furious at having to continue to deal with Prime Minister Alexis Tsipras and Finance Minister Yanis Varoufakis. Expect more anti-eurozone rhetoric from similar radical parties.
Will Greece leave the eurozone?
That is what the EU says, and is likely to happen. Without a deal, Greece will be cut off from long-term funding from the European Central Bank, and will have to default more widely on its debts. The assumption is it will effectively devalue by printing its own currency, and start again. However, both the Greek Government and some financial analysts say it could still default, agree to a new financing deal, and stay in the euro.
Will Greece run out of cash?The ECB will decide whether to continue its financial lifeline to the Greek banks. The Greek banks are at risk because they are heavily exposed to the Government's own debt. If the Government can't pay, and the banks go bust, then it is not clear what happens to savers' money, government salaries or pensions.
Will Greece start printing drachmas? How?
British firms like De La Rue, which prints 150 currencies, are believed to have been contacted. Switching a currency could, and would, take months. All machinery that bears the euro symbol will have to be adjusted. And then there is the complexity of reordering financial institutions.
Will this be better for Greece's economy?
Some believe a new currency, properly valued against those of its trading partners, will help the Greek economy. A weaker currency can lead to higher exports and more tourism, as Greek products and hotel prices become cheaper. But it can also lead to
inflation, while many Greeks also see the austerity reforms as a much-needed measure to make the country more economically dynamic. They also believe the EU provides a
powerful check on Syriza's more radical elements.
What does it mean for the rest of Europe?
The world's economy is at risk if the eurozone begins to melt down. EU leaders are confident it will not, but they have been wrong before. A "No" vote will be a shot across the bows of EU leaders that in negotiations with David Cameron over Britain's membership referendum they cannot take risks with public opinion.
Will tourists be affected?
Foreign bank accounts are not subject to the 60 ($99) withdrawal limit, but cash machines are running short. Increasingly, shops are asking for cash rather than cards. Tourists are likely to continue to be able to pay in euros.
- Telegraph Group Ltd
