Logo Polskiego Radia

Kopacz: no option but Grexit after "no" vote

PR dla Zagranicy
Jo Harper 05.07.2015 21:31
PM Ewa Kopacz said late on Sunday that she sees no option other than Greece exiting the eurozone after the Greek people voted "no" to further austerity.
Ewa Kopacz. Photo: PAP/Leszek SzymańskiEwa Kopacz. Photo: PAP/Leszek Szymański

“If these results are upheld, then there is only one route for Greece to take – to leave the eurozone. Greeks today are the political victims of a bunch of populists,” Kopacz said.

“But we in Poland have stable public finances, currency reserves in the central bank and finance ministry. We can react fast if the złoty starts to fall,” she added.

Greece appeared late Sunday to have voted no after five years of bailouts, budget battles and a 25 percent shrinking of its economy. It is now on the verge of becoming the first country to leave the eurozone.

Its government missed a debt payment to the International Monetary Fund last week, and the referendum was called by PM Alexis Tsipras after negotiations broke down in Brussels.

The troika of the European Commission, European Central Bank and International Monetary Fund insisted that Greece cut its pensions by 1 percent of GDP. The government responded that it would cut them only half of that and make up the difference with higher taxes on businesses.

Donald Tusk, the president of the European Council, told Politico last week: “For me it’s very clear that the referendum is not voting for Greece about being in the eurozone or not … I hope nobody’s interested in this kind of choice.”

However, European Commission President Jean-Claude Juncker took a more pessimistic view in recent days, while UK PM David Cameron meanwhile has said the choice is one of Greece staying or leaving the eurozone.

President of the European parliament, Martin Schulz, said there could be more emergency loans from the EU to Greece to pay civil servants and keep public services such as transport, energy and the healthcare system running.

Meanwhile, Germany’s finance minister, Wolfgang Schäuble, said the choice as between holding on to the euro or just being “temporarily without it.”

The European Central Bank, which last weekend capped the emergency lending it provides to Greece’s banks, is due to meet on Monday.

Almost 9.9 million Greeks could vote in the referendum. 108,371 who just turned 18 will have voted for the first time, according to authorities.

A no vote was supported by both the parties in government and the neo-nazi Golden Dawn party. The centre-right opposition New Democracy party campaigned for a yes vote, as have Pasok and To Potami, both of the centre-left.

If Greece had voted "yes," there would probably have to have been new elections, analysts commented.

The first signs of market reaction will come late Sunday when Asian markets open. But Monday is the real test. Investors could refuse to lend Greece money at almost any cost, as banks and the government lack essential funds to operate.

A first step could be to enact legislation that would convert financial assets and liabilities under Greek law from euros to drachmas at par (one for one), with the drachma then allowed to float against the euro, before depreciating. (jh)

Print
Copyright © Polskie Radio S.A About Us Contact Us