Greece votes against poverty and austerity in historic referendum

PANICKED Greek citizens have tried to vote their way out of poverty, but the stunning result could have disastrous consequences.

PANICKED Greek citizens have tried to vote their way out of poverty in a historic referendum that has shocked Europe and sent world leaders into crisis mode.

Leaders in Germany and France have called for an emergency European Union summit to discuss Greece’s financial crisis after more than 61 per cent of voters decided to reject tough austerity conditions attached to a bailout deal that expired last Tuesday.

It’s the first time a developed nation has defaulted on an International Monetary Fund loan with the country losing access to existing financing. The country’s banks have so little money left in reserve, they are predicted to run out within an hour if they open.

The unprecedented crisis has the world nervously waiting to see what will happen next.

An anti-EU protester burns an EU flag outside the European Commission offices in Athens. Picture: Louisa Gouliamaki

EU leaders had issued strong warnings to Greece that rejecting their lifeline with a ‘No’ vote could push the country towards crashing out of the eurozone.

While the Greek government told voters this wasn’t a certainty, Credit Suisse Group has estimated there was a 75 per cent probability the country will be forced out of the shared currency, Bloomberg reports.

But the government says the people have issued a “clear mandate” with defiant Prime Minister Alexis Tsipras’ saying in a tweet that the Greeks “proved they don’t bow to blackmail, to threats”.

Since Greece was hit by its debt crisis in 2009, measures have been introduced to tighten government spending.

Government employee wages have been frozen and bonuses and entitlements slashed. Hundreds of thousands of jobs have been cut.

The further measures that Greece voted against involved the EU pushing Greece to accept reform of its pension system, upon which more than a fifth of its population relies, as well as imposing new taxes on businesses and the public.

Thousands of government supporters have gathered in central Athens in celebration waving Greek flags and chanting “No, No, No”.

“We don’t want austerity measures anymore, this has been happening for the last five years and it has driven so many into poverty, we simply can’t take any more austerity,” said Athens resident Yiannis Gkovesis, 26, holding a large Greek flag in the city’s main square.

Tsipras, who was tipped to resign if the vote came back with a ‘Yes’ majority, has clocked up the ballot as a win for democracy, proving Greece “won’t be blackmailed”.

“Today we celebrate the victory of democracy,” he said.

“Today’s referendum doesn’t have winners or losers. It is a great victory, in and of itself.”

Greek Prime Minister Alexis Tsipras after voting. Picture: Aris Messinis

Polling station officials count ballots. Picture: Louisa Gouliamaki

The result means Greece goes back to negotiating with international creditors and could see the country exit the eurozone in the most serious crisis in the euro’s short history.

There is no precedent for what will happen if Greece is forced out of the eurozone. It could see Greece’s former currency, the drachma, return - cutting in half the value of every euro saved by Greek citizens.

But before any major moves are made, Greece remains in economic limbo, hoping for emergency cash injections as banks remain closed with only €500 million in cash reserves.

Greece could be left a cashless economy, with the supply of €20 notes already exhausted and Greeks queuing for ATMs only allowed to withdraw €50 each day.

But money is becoming increasingly useless, with supplies drying up in supermarkets and other stores as a knock-on effect from cautious suppliers demanding cash-only payments has seen shelves stripped bare.

Remaining grocery items are being quickly snapped up with panicked citizens preparing for the worst stocking up on essentials and non-perishable items.

Stores selling non-essential stock are suffering with desposible cash a rarity. Greeks can’t even buy songs from iTunes thanks to capital controls.

People stand in a queue to use an ATM of a bank during the referendum day voting in Athens. Pic: Thanassis Stavrakis

Athens Chamber of Commerce and Industry president Constantine Michalos told the UK Telegraph the banks were quickly running out of money.

“We are reliably informed that the cash reserves of the banks are down to €500m,” he said.

“Anybody who thinks the banks are going to open again on Tuesday is daydreaming. The cash would not last an hour.”

Although Greece and the eurozone are now in uncharted economic waters, it’s clear that the ‘No’ result means chaos.

Nobody knows what a possible Greek exit from the euro would look like or what it would mean for world markets.

And it’s unclear what happens next, apart from a period of economic pain.

Eurozone nations will hold a summit on Tuesday to discuss the Greek referendum result, EU President Donald Tusk said, after the German and French leaders called for a meeting.