Greeks Split Down Middle Before Bailout Referendum: Bloomberg Poll

Athens (July 3)  Greece is divided right down the middle heading into Sunday’s referendum on European bailout proposals, portending even more upheaval for the stricken nation.

A poll commissioned by Bloomberg News showed 43 percent intend to vote “no” to reject the austerity demanded by creditors in exchange for financial aid; 42.5 percent back a “yes” to accept the conditions, the survey of 1,042 people by the University of Macedonia Research Institute of Applied Social and Economic Studies showed. The margin of error was 3 percent.The survey suggests that the plebiscite may not resolve anything as the nation’s economic and political crises deepen. While the July 2 poll showed more than four in five Greeks want to stay in the euro, the nation’s crippled banks and Premier Alexis Tsipras’s isolation from other European leaders have thrown into doubt the country’s future in the currency union.

“This referendum has divided Greek society among two groups who have a different understanding of the question at hand,” Nikos Marantzidis, the pollster and a professor of political science at the university, said in an e-mail. Besides the "yes'' supporters, there are “those who really think that the future of the country is outside the euro area and even the EU, and those who consider the referendum to be a negotiating tactic,” he said.

Tsipras called the snap vote unexpectedly last weekend as talks with creditors broke down. He argues that Greeks can reject their proposals and still remain in the euro, winning better terms for its debt in the process — a claim disputed by almost everyone else.

A win for the “yes” camp, which is backed by the main opposition parties, could lead to the ouster of the Tsipras government while opening the door to continued aid. Finance Minister Yanis Varoufakis said in a Bloomberg Television interview Thursday that he would resign after such an outcome, and that the composition of the government may change “because some of us will not be able to stomach it.”

Support for the “no” side has declined since last Saturday, when 52 percent said that was their choice, according to the poll. Support for “yes” rose as the bank closures that began on Monday began to suffocate commerce, climbing from 26.5 percentThe poll also showed 81 percent believed remaining in the euro offers the best prospects for the future, a number that has also climbed since last Saturday.

A close referendum result may just worsen Greece's situation, said Marchel Alexandrovich, an economist in London at Jefferies Group. "We could basically be stuck in the same position, with Tsipras leading a divided country," whereas a clear "yes" win would probably drive him from office, Alexandrovich said.

European leaders have encouraged Greeks to vote “yes.” Speaking in West Africa, French President Francois Hollande said that “if it’s a ‘yes,’ negotiations can quickly re-start” on a fresh bailout. “If it’s a no, we are in unknown territory,” he said.

Greeks go to the polls in an unusually strained atmosphere, even in a country that has endured more than five years of tax increases and spending cuts and seen its economy shrink by a quarter since 2009.

As the sun set over Athens on Thursday, a rally by the Greek Communist Party, which supports the “no” camp, took over central Syntagma Square and the surrounding area, supporters waving red flags adorned with its hammer-and-sickle emblem. Rival rallies by each side are planned for Friday evening, with Tsipras planning to speak at 9 p.m. local time.

Greece this week became the first developed country to miss a payment to the International Monetary Fund, skipping a $1.7 billion obligation. The Washington-based lender estimates that Greece will need at least another $40 billion in international support, as well as easier terms on outstanding debt, to keep its finances manageable.

While banks' reserves will probably only last until Monday, when European Central Bank policy makers plan to consider the level of emergency assistance, Varoufakis insists that they'll reopen on Tuesday as planned. The local media has begun to speculate that deposits could be seized after a “no” vote, though Minister of State Nikos Pappas told Bloomberg Television that the government has no plans for such a “bail-in.”

Source: Bloomberg