FACTBOX- What looms for Greece after referendum - RTRS
03-Jul-2015 08:29:21
ATHENS, July 3 (Reuters) - Greek Prime Minister Alexis
Tsipras's plan to hold a referendum on Sunday on creditors'
demands for austerity has prompted a breakdown in talks with
lenders, forced Greece to shut banks and left its future in the
euro in doubt.
The result of the vote remains unclear as campaigning gets
underway in earnest. But whether Greeks choose 'yes' or 'no',
the country is expected to face a new period of uncertainty and
political turmoil.
Here are the main scenarios likely after the vote:
"YES" VOTE TO BAILOUT TERMS
Greece's left-wing government has openly urged Greeks to
vote 'no'. It would be political suicide for Tsipras to
implement a programme he has repeatedly called a "humiliation"
for his country and which he has vehemently opposed.
Tsipras has strongly hinted that he would step down in the
event of a 'yes' vote, telling Greek television this week: "If
the Greek people want to have a humiliated prime minister, there
are a lot of them out there. It won't be me."
If Tsipras resigned, the country would normally be expected
to go to snap elections - with September cited as a likely time.
But given Athens faces major debt payments later this month
and is at the peak of a financial crisis that has forced it to
shut banks, the president is likely to push for the formation of
a cross-party, "national unity", interim government to continue
talks with lenders and keep Greece afloat until elections are
held.
Pulling together such a government will not be an easy feat.
Pro-euro parties like the centrist To Potami, the centre-left
PASOK and the conservative New Democracy have signalled their
willingness to take part in such a government. But together they
hold only 106 seats in the 300-seat parliament.
That would mean Syriza and its junior coalition partner -
the right-wing Independent Greeks party - would have to support
or join such a government to keep it going. Such a government
would likely be led by a non-partisan or so-called technocrat;
Former Prime Minister Costas Karamanlis made a rare public
address urging Greeks to vote yes on Sunday, setting tongues
wagging that he could be one such candidate.
A national salvation government would not be unprecedented
in Athens. The last time Greece flirted with a referendum - in
2011 when former Prime Minister George Papandreou sought one
before scrapping it and being ousted - a technocrat government
backed by the major parties replaced him until elections were
held the following year.
Some Syriza officials say in the case of a 'yes' vote,
Tsipras himself might opt to stay and attempt to keep
negotiations going with lenders on the understanding that the
country would head to elections once the country's finances
stabilised by September.
Euro zone policymakers have openly spoken out in favour of a
"yes" vote. Chancellor Angela Merkel has signaled that she would
be ready to negotiate a third bailout package for Greece, though
German officials are skeptical about whether a new pro-bailout
government can be in place and have negotiated a third package
by July 20th when a crucial payment to the ECB is due.
"NO" VOTE IN REFERENDUM
Greek government officials say a "no" vote would strengthen
Greece's negotiating hand with creditors, a prospect that euro
zone policymakers, including the head of the euro zone finance
ministers, Jeroen Dijsselbloem, have flatly denied.
Tsipras's government has said it would immediately resume
talks with creditors. But European officials believe it would be
very hard to agree a new bailout since the 'no' vote would be
interpreted as a rejection of engagement with creditors.
Euro zone policymakers have warned that a "no" vote would
signal a rejection of the euro and shut the door on the prospect
of further aid from creditors, leaving the country in uncharted
territory and isolated within the euro zone bloc.
Greece would likely end up defaulting to the ECB on huge
payments due on July 20 and see its financial crisis deepen
rapidly, with banks unlikely to open amid the uncertainty. The
ECB would likely continue to freeze or yank emergency funding to
Greek banks, further raising pressure on Tsipras as he tries to
reach a deal in the midst of a full-on banking collapse.
That in turn could force Tsipras to resign to pave the way
for a national unity government. The government could also opt
to issue a parallel currency or IOUs to tide it over -
effectively setting in motion a "Grexit".
(Compiled by Deepa Babington)
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Keywords: EUROZONE GREECE/SCENARIOS
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