Greeks deliver emphatic rebuke to European austerity

ATHENS — Greek voters on Sunday decisively rejected a bailout proposal that officials here had scorned as “blackmail,” giving their government a desperately needed victory in its showdown with European creditors .

With nearly all of the votes counted, “no” had won a landslide 61 percent – a bigger margin than nearly anyone had predicted. The result sent thousands of government supporters streaming into central Athens’ Syntagma Square to wave blue-and-white Greek flags, dance to traditional folk songs and revel in their collective defiance of dire European warnings.

But even as they celebrated, an angry reaction from European officials suggested that Greece’s profound economic struggles may be only just beginning. With Greek banks on the verge of insolvency, analysts immediately raised the odds that Greece will soon be ejected from the euro. Government opponents despaired that the country may have just taken a dark turn.

In a speech to the nation, Prime Minister Alexis Tsipras praised the Greek people for their “very brave choice,” and promised it would be rewarded.

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“You gave me the power not to break away from Europe, but to achieve an agreement with Europe that will take us away from austerity and bring us into a new era,” he said.

Tsipras called the referendum a little over a week ago, gambling that voters would back him in his rejection of Europe’s latest cash-for-cuts deal, and give him leverage to win a better offer.

The outcome represented an extraordinary rebuke to the established European order, one that shook the continent to its core.

Yet despite Sunday’s victory, it remains unclear whether Tsipras’s gamble will pay off. The European Council announced late on Sunday that the continent’s leaders would convene an emergency summit on Tuesday to discuss Greece. Finance ministers will also gather.

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Several top European officials suggested there would be no new leeway for Greece, and that in fact the vote had made a deal less likely.

Germany’s deputy chancellor, Sigmar Gabriel, said Greece had “destroyed the last bridges across which Europe and Greece could have moved toward a compromise.”

“Tsipras and his government are leading the Greek people onto a path of bitter sacrifice and hopelessness,” he told Berlin daily Der Tagesspiegel.

Another German official, the ruling party deputy chairwoman, Julia Klöckner, tweeted: “The EU is not a make-a-wish club in which a single member sets the rules and the others pay the bill.”

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Ominously, Jeroen Dijsselbloem, the leader of eurozone finance ministers, called the outcome of the vote “very regrettable for the future of Greece.”

Others were more conciliatory. Belgian Finance Minister Johan Van Overtveldt told the VRT television network that the Greek vote would complicate matters, but that the door was open to resume talks “within hours.”

Analysts were downbeat about prospects for a deal. Malcolm Barr of JP Morgan wrote in a research note that “Greek exit from the euro appears more likely than not.”

Nick Malkoutzis, an analyst with the website Macropolis, rated the chances of an agreement any time in the near future as “very slim.”

But he also said that Europe will feel pressure to reopen serious talks. “It would be a really damaging precedent for leaders to refuse to enter negotiations after a democratic vote in a member country,” he said.

Time is short: Greece owes billions of euros to its creditors on July 20, but the country is broke. A more pressing problem is the perilous state of its banks. On Sunday night they were in desperate need of a fresh injection of cash from the European Central Bank. But it remained unclear whether the additional aid would be forthcoming.

The banks were closed all of last week, but continued to dispense up to 60 euros a day per customer. Without greater access to cash, they could run out as soon as Monday.

Despite widespread confusion in the days leading up to the Sunday vote, balloting in this Mediterranean nation of 11 million proceeded smoothly under cloudless blue skies, with few reports of trouble or irregularities.

Greece’s radical leftist government came to power just over five months ago with a promise to deliver a new deal for a country that has been brought to its knees by its sky-high debt and the strict austerity prescribed to reduce it.

But it ran into a wall of opposition from European creditors, who have resisted granting Greece the debt forgiveness it has sought.

Last week, both Tsipras and Finance Minister Yanis Varoufakis had said they believed that if Greece voted “no,” a deal could be struck with Europe within a day or two. European officials scoffed at such claims, insisting that any deal will only come through long and difficult negotiation.

Wearing a gray T-shirt and a wide smile, the finance minister on Sunday night urged his counterparts to come back to the negotiating table. “We have a common aim,” he said. “Tomorrow, Europe, starting with Greece, will begin to heal its wounds.”

Greek opposition leaders also pushed for a quick deal, and said the government will be held to account if it fails to achieve one.

“If there is no agreement within 48 hours, we will reply to them harshly on Wednesday,” said Vangelis Meimarakis, a former parliament speaker who is a member of the opposition New Democracy Party.

New Democracy’s leader, former prime minister Antonis Samaras, later appeared on television, looking grave as he announced his resignation.

But elsewhere in Athens, the mood was jubilant, with people dancing in the streets and amateur fireworks lighting the skies.

“I did not expect such a result. I’m very happy,” said Zoe Makrigianni, 20, who studies mass media at the University of Athens and came to celebrate the “no” victory at a plaza near the University of Athens. “The majority of young people voted for no, because it’s for our future.”

Many people said that they had little reason to fear the uncertainty of rejecting Europe’s bailout offer after five years of economic pain.

“I have been unemployed for three years,” said Chloe Palaska, 40, who was once a French teacher. “What do I have to lose?”

Quite a bit, according to Greeks who voted “yes.” Opposition to the government’s referendum was driven by a deep fear that spurning Europe will leave the country isolated and in economic free-fall.

At the edges of the square, a few dejected “yes” supporters shook their heads at the celebration.

“They’re happy now. Let’s see about tomorrow,” said one man, who spoke on condition of anonymity because he was a government worker.

Other Greeks despaired that the country had faced an impossible choice, with no reasonable hope that conditions will improve.

Roumpini Terzaki, who runs a charity that helps 5,000 needy families, said the organization had faced shortages of food and medicine last week for the first time in its history.

“People are going hungry. It’s like an earthquake everywhere,” she said. “If we have a ‘no’ on Monday or a ‘yes’ on Monday, the situation will be exactly the same.”

Washington Post staff writer Stephanie Kirchner contributed to this report from Berlin.