Greece debt crisis: Tsipras urges 'No' to 'blackmail'

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Media caption"Nobody has the right to threaten to cut down Greece from its natural geographic body" - Alexis Tsipras

Greek PM Alexis Tsipras has called on voters to reject "blackmail" when they vote in a bailout referendum on Sunday.

In a TV address, he insisted Greece's EU membership was not at stake. He later told cheering supporters to vote "No" to "live with dignity in Europe".

There were scuffles with police as both sides held rallies in Athens.

A Greek court has rejected a challenge to the legality of the referendum, in which people will vote on the terms of further international loans.

It comes after tough talks with creditors, and EU leaders have warned that a "No" vote could see Greece leave the eurozone.

Greece's economy is already being squeezed after its bailout programme ran out on Tuesday.

Banks have been shut and limits imposed on cash withdrawals.

The head of Greece's banking association has warned that although the banks have enough funds until Monday, they will be dependent on the European Central Bank thereafter.

Desperate times

Image copyright AFP/Getty Images

It is a scene that speaks of suffering and exhaustion, and one that may well become the lasting image of the Greek debt crisis.

An elderly man, sitting on the ground outside a bank, was photographed crying on Friday morning.

The image, taken in Thessaloniki by AFP's Sakis Mitrolidis, was widely shared on social media as soon as it was published.

The man, whose name was not disclosed, was helped away soon after it was taken.

His story is not known, but those of plenty of other pensioners are.

Monthly pensions have gone down to an average of €833 ($924; £594) from an average of €1,350 in 2009, according to INE-GSEE, the institute behind Greece's biggest union.

Read more: Cost of crisis to pensioners

Claims by Greek politicians that a "No" vote will strengthen their hand in bailout negotiations have been rebuffed by European leaders.

Both EU Commission President Jean-Claude Juncker and Jeroen Dijsselbloem - head of the Eurogroup of finance ministers - have insisted a "No" vote will weaken the Greeks' position and that even a "Yes" vote will not mean a deal is easy to agree.

Several European officials have complained in strong terms about Greece's abrupt decision to hold a referendum on the terms of a bailout offer that they say is no longer on the table.

But in a ruling on Friday, Greece's top administrative court rejected an appeal lodged by two individuals who had argued that it was illegal to hold popular votes on fiscal matters.

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Media captionStefanaki Ioanna: "A yes vote will give Greece a chance"

Debt 'unsustainable'

Thousands of "Yes" and "No" supporters gathered in separate squares of central Athens on Friday, and police threw stun grenades in brief scuffles with "No" protesters.

Mr Tsipras urged Greeks, at a "No" rally later on Friday evening, to say a "proud 'No' to the ultimatums".

In his TV address, Mr Tsipras referred to an IMF report published on Thursday which said Greece would need an extra €50bn euros ($55bn; £36bn) over the next three years to stabilise its finances and repeated suggestions that Greece needed debt relief.

The recent negotiations were over the release of a final tranche of bailout funds of €7.2bn.

Greece's mountain of €323bn debt was "not sustainable", Mr Tsipras said. He said he had called for a 30% "haircut" off the debt and a 20-year grace period for the rest.

Mr Tsipras urged voters to reject the "sirens of scaremongering", but added that: "Whatever we choose... Come Monday we are all together."

Mr Tsipras faces vocal opposition at home - with opposition leader Antonis Samaras calling on "every Greek man and every Greek woman above and beyond parties" to vote "Yes", along with several deputies from Syriza's own coalition partner, the Independent Greeks.

Lenders' proposals: Key sticking points

  • VAT (sales tax): Alexis Tsipras accepts a new three-tier system, but wants to keep 30% discount on the Greek islands' VAT rates. Lenders want the islands' discounts scrapped
  • Pensions: Ekas top-up grant for some 200,000 poorer pensioners will be phased out by 2020 - as demanded by lenders. But Mr Tsipras says no to immediate Ekas cut for the wealthiest 20% of Ekas recipients
  • Defence: Mr Tsipras says reduce ceiling for military spending by €200m in 2016 and €400m in 2017. Lenders call for €400m reduction - no mention of €200m

Source: European Commission document, 26 Jun 15 (pdf)

Greek debt jargon explained

Tsipras and his Greek gamble

A poll published in Ethnos newspaper on Friday showed the two sides evenly split, with the "Yes" vote at 44.8% and the "No" vote at 43.4%.

But the same poll showed 74% in favour of staying in the euro, with just 15% choosing a return to a national currency.

The European Commission, the European Union's executive arm - one of the "troika" of creditors along with the International Monetary Fund and the European Central Bank - wants Athens to raise taxes and slash welfare spending to meet its debt obligations.

On Tuesday, the previous eurozone bailout expired, depriving Greece of access to billions of euros in funds, and Athens missed a €1.5bn repayment to the IMF.