ATHENS, Greece — Despite triumphing in a popular vote against austerity, Greece’s leaders Monday faced the urgent need to heal ties with European creditors and reach a financial rescue deal to prevent it from falling out of the euro — possibly within days.
“Time is of the essence,” German Chancellor Angela Merkel said after discussing the Greek crisis with French President Francois Hollande in Paris. “(Greek) proposals have to be on the table this week.”
Prime Minister Alexis Tsipras won big in Sunday’s referendum, with 61 percent of voters rejecting the economic measures creditors had proposed in exchange for loans Greece needs to remain afloat. He also received the rare backing of opposition parties to restart bailout negotiations.
But his bolstered mandate to push for better concessions from creditors hit the hard reality of the country’s deteriorating finances, with banks facing the risk of collapse within days unless a rescue deal is reached.
Hours after revelers left Athens’ main Syntagma Square to celebrate the “no” victory, pensioners crowded outside nearby banks to collect emergency payments, markets worldwide were rocked by the result, and European lenders warned that Greece faced a strict deadlines to avoid disaster.
The European Central Bank maintained its level of cash assistance to Greek banks ahead of Tuesday’s emergency meeting of European leaders in Brussels, to be joined by Tsipras.
In a sign of compromise, Tsipras appointed a new finance minister to lead talks with creditors and replace Yanis Varoufakis, the hard-talking professor who clashed regularly with his European counterparts.
Euclid Tsakalotos, a 55-year-old economist, has appeared more willing to engage with creditors and will be tested as soon as Tuesday, at a meeting of the other 18 eurozone finance ministers in Brussels.
“I won’t hide from you that I am very nervous and very anxious. I am not taking over at the easiest moment in Greek history,” Tsakalotos said after being sworn in.
World leaders digested the news from the Athens and the significance of a “no” vote after leading European politicians had urged Greeks to approve the austerity measures.
Longtime Cuban leader Fidel Castro wrote to Tsipras, saying his “bravery has won admiration by the peoples of Latin America.”
In Paris, Merkel and Hollande both expressed their respect for the result of the Greek vote, but urged swift action from Athens.
“I stress that there is not lots of time left. There is urgency for Greece. There is urgency for Europe,” Hollande said.
Spanish Prime Minister Mariano Rajoy said Greece needs to enact reforms that will spur economic growth and comply with obligations to pay off its debt to remain part of the eurozone.
“We’re inclined to help Greece but Greece must follow Europe’s rules,” he said in an interview on Spain’s Telecinco evening news program.
The ongoing Greek drama hurt stocks around the world, particularly in Europe. The losses were not as great as some had feared, however, suggesting investors think that a Greek exit from the euro, while devastating for the country and destabilizing in Europe, would be manageable for the global economy.
“The ‘no’ vote in Greece’s referendum on Sunday dramatically increases the risk of a slide toward a disorderly Greek exit from the eurozone,” ratings agency Fitch said. “An agreement between Greece and its official creditors remains possible, but time is short and the risk of policy missteps, or that the two sides simply cannot agree a deal, is high.”
Tsipras has agreed to imposing more harsh austerity measures, following a six-year recession, but he wants eurozone lenders to grant the country better terms for bailout debt repayments.
“The prime minister is … committed to starting a fundamental debate on dealing with the problem of sustainability of the Greek national debt,” a statement signed by the government and three pro-European opposition parties said in a rare sign of solidarity
European officials appear to be split on Greece’s demand for easier debt repayment — with lead eurozone lender Germany still highly reluctant.
German Finance Ministry spokesman Martin Jaeger said Berlin’s position “is well-known. … A debt cut is not an issue for us.”
Sigmar Gabriel, the German vice chancellor, said Europe should be preparing humanitarian assistance for Greece.
“The situation that is now being created by the referendum makes me sad, because life for the Greek population is going to get harder in the coming days and weeks,” he said. “After yesterday’s celebrations in the streets, there’s a danger of a rude awakening soon.”debtECBEUEuroeurozoneGermanyGreeceIMF