Greek vote too close to call

Greek vote too close to call

A shopper surveys empty shelves in a supermarket in Athens, where shortages are getting worse by the day as the country runs out of money. (AFP Photo)
A shopper surveys empty shelves in a supermarket in Athens, where shortages are getting worse by the day as the country runs out of money. (AFP Photo)

ATHENS — Greece hurtled on Saturday toward a crucial bailout referendum that could determine its financial future and even its place in the euro zone, as polls showed the "Yes" and "No" camps neck and neck.

On the eve of the vote that could also make or break the radical-left government, Greeks were increasingly spooked by rumours that capital controls were leading to food and medicine shortages.

As well, uncertainty was mounting over when the country's banks would reopen, amid reports that they only had enough cash to last a day or two.

"I've heard shops are running out of flour, sugar and salt. I'm really worried, how will we manage if we can't get to our money and there's no food to buy?" Lena Antoniou, a 35-year old mother of two, told AFP.

Nikos Archondis from the Panhellenic Exporters Association (PEA) told AFP "certain supermarkets are very concerned because they cannot forecast how the situation will evolve". adding that stocks of meat, cheeses, fruits and vegetables "risk running low in the following weeks".

Many businesses said they had been forced to ask workers to take unpaid leave, some shops were refusing card payments in an effort to hoard cash and there were reports of companies paying workers in IOUs valid in local supermarkets.

"No one accepts your credit cards. Most people are buying food now because they fear the worst," said Andreas Koutras, a 51-year-old financier.

Some of the world's top economists are united in arguing that a "No" result is the country's best — or least-worst — choice.

A "No" referendum campaign poster is seen before a statue of the Greek Godess Athena in Athens. (Reuters Photo)

They say Greece's debt burden of 323 billion euros is unsustainable and needs to be reduced. By leaving the euro zone, the country could chart a new path toward stability, though the short-term pain for Greek citizens would be severe.

Prime Minister Alexis Tsipras got a rock-star welcome at an Athens rally late Friday as he sought to revive support for the "No" vote to strengthen his hand in talks with international creditors.

EU leaders have warned that a "No" victory could cause Greece to crash out of the euro zone. But Tsipras and Finance Minister Yanis Varoufakis have accused them of fear-mongering.

In an interview published on Saturday the outspoken Varoufakis accused the creditors of "terrorism".

As tensions rose he was forced to deny a Financial Times report that suggested Greek savers could lose 30% of their bank deposits to shore up the banking system, calling it a "malicious rumour".

The British business daily, quoting unidentified bankers and businessmen close to negotiations, reported that Greek depositors with over 8,000 euros (US$8,900) in an account may be forced to take a "haircut".

Many Greeks have crossed over to the "Yes" camp since capital controls were imposed this week limiting daily ATM withdrawals to just 60 euros in order to stem a cash haemorrhage after Greece's international aid package ran out on Tuesday.

Joseph Stiglitz, a Nobel laureate in economics, wrote tis week that voting "Yes" for the conditions tied to the bailout or "No" both carry "huge risks".

But "a no vote would at least open the possibility that Greece... might grasp its destiny in its own hands" and shape a future that "though perhaps not as prosperous as the past, is far more hopeful than the unconscionable torture of the present", he said.

Paul Krugman, another Nobel winner, who writes for The New York Times, agreed. A "No" result, he wrote, may force Greece to exit the euro, "which would be hugely disruptive in the short run. But it will also offer Greece itself a chance for real recovery".

Thomas Piketty, the respected French economist who wrote the best-selling Capital in the 21st Century, said Greek voters would be right to reject the bailout offer put to them in the referendum.

"For me, it's clear: it's a bad plan," he said.

However, 246 Greek economics professors wrote in an open letter that "we strongly believe that, at this crucial point, it is of paramount importance ... to preserve our position in the eurozone and the EU".

"We believe that the recessionary consequences of debt default and exit from the euro zone ... will be much worse than the effects of a painful compromise with our EU partners and the IMF."

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