EU leaders urge Greeks to vote 'yes' to stay in euro

European Commission President Jean-Claude Juncker gives a press conference on Greece at the EU headquarters in Brussels. (AFP PHOTO/JOHN THYS)

BRUSSELS: European leaders on Monday (Jun 29) pleaded with Greek voters to back hotly disputed bailout proposals in a crunch referendum or face leaving the euro as bank closures left many in Greece scrambling to find cash.

In Brussels, an emotional EU chief Jean-Claude Juncker bitterly criticised Greek premier Alexis Tsipras, saying he felt "betrayed" by the leftist Syriza government's behaviour and adding it was time to tell voters "the truth".

Other EU leaders including Germany's Angela Merkel France's Francois Hollande and Italy's Matteo Renzi put up a united front, stressing that the vote on the bailout package in Sunday's referendum was effectively a vote on Greece's place in the euro.

"I will tell the Greeks, who I love deeply, that you shouldn't choose suicide just because you are afraid of death," Juncker said, urging them to vote "Yes" in Sunday's vote.

"A 'No' would mean, regardless of the question posed, that Greece had said no to Europe," added the European Commission boss, previously Tsipras's closest - and sometimes only - ally in five months of debt talks. In response to Juncker's comments, a Greek government spokesman questioned his "sincerity".

With Greece hurtling towards a default on payment to the IMF on Tuesday and possible exit from the euro, Athens imposed capital controls and closing banks. People could only withdraw €60 (US$67) per day from ATMs, leading some to dub it "Black Monday".

"I have a baby to feed, what am I supposed to do?" secretary Zoe Kallis, 32, told AFP after failing to get money out of the third ATM she had tried in Athens's Kolonaki district. "I feel like I'm voting for sudden death or slow death," added office manager Maria, 38, who wants Greece to stay in the EU. "It feels like it's game over."

INVESTORS' UNCERTAINTY INCREASING

Global stock markets were down Monday over fears that Greece could be heading for a Grexit - or exit from the eurozone. In Europe, London's FTSE 100 fell 1.97 percent, Frankfurt's DAX 30 lost 3.56 percent and the CAC 40 in Paris shed 3.74 percent.

But it was weaker eurozone nations that were hardest hit, with both Lisbon and Milan plunging more than five per cent and Madrid down 4.56 per cent. In New York, the Dow Jones Industrial Average was trading down 1.17 per cent compared to Friday's close.

"So far we have little evidence to suggest that depositor confidence in other European countries is dented or that credit conditions have immediately deteriorated," said Mark Burgess of Columbia Thread needle Investments.

"But the certainty with which we attach to this positive picture has diminished at the margin, and so the price we are willing to pay has reduced."

Greece, which has received €240 billion (US$270 billion) of bailout cash since 2010, is expected to default on €1.5 billion (US$1.7 billion) due to the International Monetary Fund on Tuesday. Its debt stands at nearly 180 per cent of GDP.

Eurozone finance ministers on Saturday denied it the extension to its bailout agreement that would have kept it financially afloat beyond Jun 30 until the vote date.

Pushed by that decision, the European Central Bank froze the level of its emergency lifeline for Athens Sunday, prompting a rapid escalation of the crisis in the days before the referendum.

DOOR STILL OPEN FOR TALKS

Tsipras, whose Syriza party came to power in January on an anti-austerity platform, has advised voters against backing a deal he said spelt further "humiliation" for Greece.

The country has already endured five years of recession, while unemployment has more than doubled from 10.3 per cent in 2009 to 25.6 per cent this year and pensions and benefits were roughly halved between 2010 and 2014.

But EU leaders have indicated they could still be open to an agreement. Hollande and US President Barack Obama agreed in a telephone call Monday to "combine their efforts to favour a return to talks," a statement from the French presidency said.

German Chancellor Angela Merkel said any new negotiations with Greece on the debt crisis should come after the referendum "Should the Greek government ask for negotiations, for example after the referendum, we would of course not refuse," she told reporters. The outcome of the popular vote is "of course to do with the future of the euro", she added.

Eurogroup head Jeroen Dijsselbloem also said that further talks with Greece were possible. "I continue to say that, for us, the door is still open, although in the meantime the possibilities and time are very limited," the head of the group of eurozone finance ministers told journalists in The Hague.