BUSINESS

The Latest: Greek premier says 'the bigger the 'no' vote, the better agreement we'll achieve'

07/02/2015 03:37 EDT | Updated 07/01/2016 05:59 EDT
ATHENS, Greece - The latest news on Greece's financial woes (all times local):

___

10:45 p.m.

Greece's prime minister says "the bigger the 'no' vote, the better agreement we'll achieve" and that a powerful "no" in Sunday's austerity referendum would "send tremors" throughout Europe.

Alexis Tsipras told private Antenna TV station in an interview Thursday that he wants Greece to remain within the eurozone, but with a sustainable bailout agreement. He said a "yes" win would lead to a deal that puts additional burdens on Greece without growth.

He skirted a question whether he would call elections if the "yes" side prevails, saying that he would remain "the institutional guardian of the constitution" and set in motion "the necessary procedures."

Tsipras told state TV in an interview earlier this week that he was not an "all weather" prime minister — strongly indicating he would step down if his proposal is defeated.

___

8:45 p.m.

Greece's government says the International Monetary Fund's report on Greece "completely justifies" Greece's position on debt sustainability.

In a report released Thursday, the IMF says Greece needs both debt relief and 50 billion euros ($56 billion) in new financing from October through 2018.

Prime Minister Alexis Tsipras' government has long argued that any new deal with Greece's creditors would have to address the country's debt by including some form of restructuring or debt relief.

Government spokesman Gabriel Sakellaridis says the IMF report "constitutes a confession of failure of the (Greek bailout)."

Others criticized the report. Ashoka Mody, a visiting professor at Princeton University, said it shows the IMF and the European Union were not "negotiating in good faith" with Greece since they did not talk about debt relief.

___

8:25 p.m.

The senior party in Greece's ruling coalition thinks the Greek media is being biased in its reporting ahead of the country's austerity referendum on Sunday.

Syriza, the left-wing party of Greek Prime Minister Alexis Tsipras, is appealing to the country's media watchdog to get private TV and radio stations to stop from what it called an "incomprehensible and unprecedented" campaign in favour of a "yes" vote.

In a letter Thursday to the Greek National Council for Radio and Television, Syriza said the pro-'yes' media campaign is devoid of any impartiality and fans talk of impending doom that threatens to undermine social stability.

Syriza asked the council to make Greek media allocate equal time to both sides as required.

___

7:55 p.m.

Ashoka Mody, a visiting professor in international economic policy at Princeton University, thinks the International Monetary Fund's latest report on Greece shows that the IMF and the European Union were not "negotiating in good faith" with the debt-wracked nation.

The IMF says Thursday that Greece needs both debt relief and 50 billion euros ($56 billion) in new financing from October through 2018.

Mody told The Associated Press that "if the IMF and other creditors had this document while they were negotiating with the Greeks, it is completely unconscionable that they did not discuss deep debt relief."

Mody believes Greece's creditors need to write down the country's debt by perhaps half and stop insisting that the Greek government cut spending and raise taxes. He says austerity measures have proven counterproductive, driving the Greek economy into recession and making it harder for the country to repay its debts.

___

7:20 p.m.

Here's the question all Greeks want to know: When will the banks reopen?

Greek Finance Minister Yanis Varoufakis had an answer for that and other key questions posed to him Thursday by reporters ahead of Sunday's referendum on whether Greece should accept creditors' demands for more austerity in exchange for more loans.

Will the banks reopen? Varoufakis said: "Of course they'll open! Of course!"

When will that be? He replied: "On Tuesday."

Will the banks reopen with or without a deal between Greece and its creditors? Varoufakis said: "With a deal, which is a certainty."

European leaders have said if the vote goes Varuoufakis' way and Greeks reject the demands, Greece will face financial chaos and eventually be pushed out of the 19-nation eurozone.

___

6:55 p.m.

NATO Secretary General Jens Stoltenberg says the military alliance is concerned about the financial turmoil in Greece, which is a member of the 28-nation group.

Stoltenberg called Greece "a staunch ally and a committed ally" on Thursday. He said the Greek government stands by its "commitments in the alliance. This good for Greece and good for NATO."

Speaking at a press conference in Bucharest, the Romanian capital, Stoltenberg said NATO was following European Union efforts "very closely" and that a solution to Greece's economic problems would be good for Greece, the EU and NATO.

One of the issues that divided Greece and its creditors before talks broke off last week was defence spending. The Greek government had offered to cut 200 million euros ($222 million) annually from its defence budget but lenders demanded twice that amount.

___

6:30 p.m.

The International Monetary Fund is putting the blame for Greece's current economic predicament largely on the Greek government of Prime Minister Alexis Tsipras.

It noted, for example, that Greece has been slow to privatize state assets. In 2011, the IMF predicted that Greece would raise 50 billion euros from selling off state properties by the end of 2015; so far, it has only raised 3.2 billion euros through privatizations.

The multinational lending agency says Greece will need debt relief and 50 billion euros ($56 billion) from October through 2018. It says European creditors will have to come up with 36 billion euros ($40 billion) of that new financing and the credit will have to be offered on "highly concessional terms" — low interest rates and long repayment periods.

___

6 p.m.

The International Monetary Fund says Greece needs debt relief and 50 billion euros ($56 billion) in new financing from October through 2018.

The IMF said Thursday that Greece's finances have deteriorated because Athens has been slow about enacting economic reforms. Last year, the IMF predicted Greece's debt would fall from 175 per cent of economic output in 2013 to 128 per cent in 2020. Now it sees Greece's debts at 150 per cent in 2020.

The IMF says creditors must offer Greece discounted interest rates and a longer repayment period.

The analysis was made before Greece defaulted on IMF loans Tuesday and closed its banks Monday. The outlook is worse now.

Greeks vote Sunday on whether to accept demands that creditors were proposing to resolve a debt standoff.

___

5:35 p.m.

The campaigns for Greece's Sunday referendum on economic demands by creditors have been hampered by the short time available to roll out their messages.

There's scarcely any polling data, television ads only began airing Wednesday and "Yes" vote posters only appeared around Athens on Thursday.

That leaves the main election rallies on Friday evening as a crucial tool. The pro-government"No" camp has won the prime rally spot outside parliament in Athens, a popular place for rallies and protests. The "Yes" rally will take place at the exact same time at Athens' Panathanian Stadium, venue of the first modern Olympic Games in 1896.

___ 5 p.m.

Campaigning for Greece's bailout referendum has begun in earnest, but voters are far from clear on the question being put to them on Sunday.

Anisia Kaklamanou, among those waiting to get into a bank Thursday in Athens, said the whole thing was confusing. She says "I don't know what to do on Sunday. Vote yes? Vote no? I don't know. All I know is that I have 120 euros ($133) to get by until whenever the banks open."

Many Greeks say they will be casting ballots to end creditors' demands for more budget cuts and tax increases.

Retiree Koula Makri said "we've been going through this crisis over the last five years and we had nothing to eat, our pensions and our wages have been slashed and some made a profit off us."

She said the long bank queues to get cash "are nothing, next to all the suicides, the soup kitchens and the homeless on the streets of Athens."

___

3 p.m.

Germany's foreign minister says the European Union's hands are tied on Greece until that nation's people vote on the last bailout offer to Athens by Greece's creditors.

Frank-Walter Steinmeier says the EU will "not be able to move things in the one or the other direction" until the referendum results are in.

Steinmeier spoke to reporters Thursday after addressing a meeting of the Organization for Security and Cooperation in Europe. He said he is "not capable any more to decipher the behaviour of the Greek government," adding he is not sure if Greek leaders themselves know how to proceed after Sunday's referendum.

___

2:50 p.m.

Former Prime Minister Costas Karamanlis is urging fellow Greeks to vote 'yes' in Sunday's referendum because the alternative could entail dangers to the country's security and bring even more hardship for the poor.

Karamanlis, who is still a lawmaker in the Greek Parliament, said in a televised address that those voting 'no' believing it would strengthen Greece's bargaining position are making a "grave mistake" despite their good intentions.

He said a 'no' victory would be interpreted around the world as a "choice to leave from the heart of Europe" and that it would be "a first step toward the exit."

Karamanlis, a conservative who led Greece before its economic crisis broke five years ago and has kept a low profile since, urged voters to "affirm with determination" that the country is an "inseparable part of Europe."

___

2:20 p.m.

President Francois Hollande says creditors could get a new rescue deal for Greece quickly if they vote 'yes' in Sunday's referendum.

Greeks will vote on whether to accept a series of budget measures that creditors proposed in exchange for loans. The proposals related to a deal on Greece's bailout program, which has now expired. But the vote will give an indication of where the Greek people stand on the talks with creditors. The government is pushing for a 'no.'

Hollande says "the consequences are not the same if it's a yes or no. If it's the yes, even if it's on the basis of proposals that have already expired, negotiations can resume and I imagine be quickly concluded. We are in something of an unknown."

Hollande was speaking in Cotonou, Benin.

___

1:40 p.m.

The head of the eurozone finance ministers' group, Jeroen Dijsselbloem, says it will be "incredibly difficult" to build a new bailout package for Greece if the country votes "no" in Sunday's referendum.

Speaking Thursday in a parliamentary committee, Dijsselbloem told lawmakers, "If the result is a 'no,' what foundation is there of ownership? And how can you then accept such a program if the result is 'no.' So it will be incredibly difficult."

The Dutch finance minister put the blame squarely on the Greek government for promoting a 'no' vote with unrealistic expectations.

He said: "The Greek government is rejecting everything with the suggestion that if you vote 'no' you will get a better or less tough, or more friendly package. That suggestion is simply wrong."

He noted that Greece's economic situation is only getting worse in the meantime, making a rescue program more difficult.

___

1:30 p.m.

The German president's office says Greek President Prokopis Pavlopoulos has cancelled a previously planned visit to Germany that was set for next week.

Pavlopoulos was to make his first visit to Germany since being elected president on Tuesday, meeting President Joachim Gauck in Berlin. Gauck's office didn't give a reason for the cancellation, but Greece is holding a referendum on Sunday in which the country's prime minister has urged voters to denounce the last deal offered by creditors for releasing bailout funds.

Pavlopoulos, a conservative law professor and veteran politician, was elected as head of state in February.

___

12:55 p.m.

Spain's economy minister says the doors for negotiations will remain open for Greece regardless of the outcome of Sunday's referendum.

Luis de Guindos has told Spain's Cadena SER radio that a "yes" vote would amount to a vote of no confidence in the Greek government.

He says that "if the 'no' vote wins, we will continue to be open to talks." He points out, however, that the conditions referred to in the referendum question no longer apply as they are based on Greece's bailout program, which expired Tuesday.

De Guindos stresses that up to a week ago, Greece and the eurozone creditors had been very close to an agreement but that the referendum announcement was an ultimatum that left no room for discussion until after the vote.

He warns the referendum could have consequences, among them Greece's exit from the euro, a scenario he says no one wants.

___

12:36 p.m.

Working out a strategy for Greece's debt burden, which stands at around 180 per cent of the country's annual GDP, is becoming a key discussion point ahead of Sunday's referendum on creditor proposals.

Greek Finance Minister Yanis Varoufakis said he won't sign any deal that doesn't include a restructuring of Greece's debts.

"I prefer to cut my arm off," he told Bloomberg TV in an interview where he also said he'd resign if the "Yes" campaign wins.

Many economists think Greece should get debt relief to allow the economy to breathe. That could take the form of a reduction in the debt, extending repayments way into the future and slashing the interest rates payable on the debts.

Greece has had some relief when in 2012, the country's private creditors agreed on a big write-down on their Greek debt holdings.

___

12:05 p.m.

Greek Finance Minister Yanis Varoufakis has said he will resign if there is a "Yes" vote in Sunday's referendum over recent creditor proposals.

Asked on Bloomberg TV whether, come Monday, if there is a yes vote, he will not be finance minister, Varoufakis said: "I will not."

Varoufakis also said he wouldn't sign any deal with creditors without any reference to a restructuring of Greece's debt burden.

Varoufakis claimed Greece was being treated as a "debt colony" that doesn't have rights.

However, he expected a "No" vote and that he and Prime Minister Alexis Tsipras will be around Monday "to forge mutually beneficial agreement with rest of Europe."

___

11:35 a.m.

Credit ratings agency Standard & Poor's is warning that a "distressed" Greek exit from the euro would have "severe" consequences for the country's economy.

A so-called Grexit, according to S&P, would cause Greek economic output to fall by 20 per cent below what it would otherwise have been after four years.

It adds that Greece would permanently lose access to financing from the European Central Bank, which would create a serious foreign currency shortage for the private and public sectors. And without the support of European institutions, Greece's payment system would shut down and its banks would not be able to operate.

"The overall economic impact of a Grexit would be severe for Greece but more contained for the rest of the eurozone," S&P says.

___

10:30 a.m.

French Finance Minister Michel Sapin says Europe remains committed to avoiding "catastrophe" for Greece and keeping it in the eurozone.

Sapin said on France's iTele television Thursday that "the exit of Greece from the eurozone is not desirable, nor envisaged."

Sapin had been pushing for an agreement with Greece before Sunday's referendum, but after a fruitless meeting of European finance ministers Wednesday, he conceded that there's no point negotiating until after the vote.

Sapin said that regardless of what happens Sunday, France's own economy will be able to bear the outcome, in contrast to the situation five years ago when the Greek debt crisis first exploded. "There are no immediate consequences for France. France is stronger than in 2010."

"We are committed to avoid a catastrophe for Greece and difficulties for Europe and France."

___

10:25 a.m.

European stock markets have opened steady, a day after Greece's European creditors said they would not talk with the Greek government about its bailout request until after Sunday's referendum.

In Greece, most banks remain shuttered and will remain so at least until after the referendum on recent creditor proposals. Greek Prime Minister Alexis Tsipras confirmed Wednesday that the referendum would take place and that he would be backing the "No" campaign.

"The Greek government would appear to continuing its game of cat and mouse with its creditors," said Michael Hewson, chief market analyst at CMC Markets.

Soon after opening, the Stoxx 50 index of leading European shares was up 0.2 per cent. The euro itself was 0.1 per cent higher at $1.1066.