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Athens in showdown with EU

Markets set to plunge after Greece votes No to austerity

GreeceGreek leaders will ask their creditors to allow the country’s banks to open this week amid a growing crisis around the rejection of the EU’s bailout proposal.

Prime Minister Alexis Tsipras declared victory in the referendum as the No campaign secured 61% of the votes, but he must now renegotiate with European Union ministers who last week closed the door on more talks.

The vote could lead to the country’s exit from the eurozone within weeks because Greece needs more money from Europe to stay afloat. This is in spite of many No voters supporting Greece’s continued membership of the euro and the EU.

Financial markets were braced for their worst period of turmoil since the height of the eurozone crisis three years ago.

German Chancellor Angela Merkel will meet French President Francois Hollande on Monday night to discuss what happens next while the European Central Bank will also convene meetings.

Prime Minister David Cameron and George Osborne, the Chancellor, will hold an emergency meeting to discuss how it might impact on Britain.

If Greece fails to get more bailout money from Europe soon, it will have to pay pensioners and public sector workers with IOUs. The country cannot borrow money from the international markets, because of very high interest rates.

The rapidly moving events in Greece have split legal experts. There is no precedent for what is happening in Athens, and the European treaties do not have any provisions for a country leaving the bloc.

 

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