ECB maintains €88bn emergency fund for Greek banks

The European Central Bank has kept its emergency liquidity assistance to Greek banks unchanged at €88.6bn, and did not impose higher haircuts which would have reduced the sum available and caused banks to collapse immediately.

However, the gloves came off in the battle over Greece as the eurogroup made the link between the political situation in the country and a deal on the debt, increasing accusations that EU countries are pushing to oust the Greek government.

After German chancellor Angela Merkel made it clear she would not consider any proposals from Athens until after Monday’s referendum, prime minister Alexis Tsipras made a televised speech to the nation advocated a no vote, saying it would strengthen his hand and allow them keep the euro.

This was followed some hours later by a statement from the eurozone finance ministers saying: “The political situation has not changed. There are no grounds for an extension.” The statemente confirmed the bailout programme had expired.

During their conference call meeting, they rejected two letters sent from Mr Tsipras in the previous 24 hours proposing changes to last week’s deal.

“At this point in time, we simply took note of these proposals,” the statement said. “The main decision was that, given the political situation, the rejection of the previous proposals, the referendum which will take place on Sunday, and the recommendation by the Greek government to vote ‘no’, we see no grounds for further talks at this point.”

Eurogroup president Jeroen Dijsselbloem said neither they nor the negotiators would discuss any further proposals from the Greek authorities, but would wait until after Sunday’s vote, “and take into account the outcome of that referendum”.

However, now that Mr Tsipras has confounded early indications and confirmed he intends going ahead with the vote, two citizens have challenged the constitutionality of the referendum. The supreme court is to hear the case on Friday.

Nikos Alivizatos, a respected constitutional lawyer said earlier in the week the plebiscite was illegal because of the way the question was posed, which did not make clear to the electorate what they were voting on, and the fact that the first part of the question is in English.

There are also issues over the ballot paper, where the box to vote no comes first, ahead of the yes box in a break with tradition.

The UN also became embroiled in the issue, saying no treaty or loan agreement can force a country to violate the civil, cultural, economic, and political rights of its population guaranteed by the UN Charter.

A statement from two of its independent human rights experts, Alfred de Zayas and Virginia Dandan, said “capitulating to an ultimatum imposing further austerity measures would be incompatible with the democratic trust placed on the Greek prime minister by the electorate.”

UN expert on foreign debt and human rights Juan Pablo Bohoslavsky said the creditors’ measures had pushed the Greek economy into recession and undermined Greeks’ human and economic rights.

“This is the moment for the international community to demonstrate solidarity with the people of Greece, to respect their democratic will as expressed in a referendum, to pro-actively help them out of this financial crisis, which finds a major cause in the financial meltdown of 2007-08, for which Greece bears no responsibility,” said Mr Bohoslavsky.

The IMF repeated its call for Greece’s European partners to provide additional financing and debt relief, together with Greece reforming its economy. They confirmed also Christine Lagarde informed the board immediately of Greece’s failure to make its €1.5bn repayment in time.

Some posters from the government party Syriza , went up around Athens yesterday and a large banner calling in Greek and English to vote no was hung on the Ministry of Finance building, facing parliament. After complaints and after the government said it was nothing to do with them, it was removed.