Greece proceeds with vote plan as creditors rebuff overture

A demonstrator holds a banner during a rally organized by supporters of the YES vote for the upcoming referendum in front of the Greek Parliament in Athens, Tuesday, June 30, 2015. Greece's European creditors were assessing a last-minute proposal Athens made for a new two-year rescue deal, submitted just hours before the country's international bailout program expires and it loses access to billions of euros in funds. (AP Photo/Petros Karadjias)
A demonstrator holds a banner during a rally organized by supporters of the YES vote for the upcoming referendum in front of the Greek Parliament in Athens, Tuesday, June 30, 2015. Greece's European creditors were assessing a last-minute proposal Athens made for a new two-year rescue deal, submitted just hours before the country's international bailout program expires and it loses access to billions of euros in funds. (AP Photo/Petros Karadjias)

ATHENS, Greece (AP) — The Greek government vowed Wednesday to go ahead with plans to have the people decide whether they want more austerity measures in exchange for a rescue deal. Greece offered more concessions to its creditors, but was rebuffed — Eurozone finance ministers refused to negotiate any more aid until the referendum clears up what the country wants.

The moves came on a fast-paced day of zigs-and-zags that saw the Greek prime minister back off his earlier refusal to consider creditors’ belt-tightening demands, yet hold firm on putting the measures to a popular vote.

The strategy was met with a cool response.

Following a late-night teleconference, the 19 eurozone finance ministers announced they were putting any further talks on hold.

“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,” said Dutch Foreign Minister Jeroen Dijsselbloem, who heads the eurozone finance ministers’ body known as the eurogroup.

“There will be no talks in the coming days, either at eurogroup level or between the Greek authorities and the institutions on proposals or financial arrangements,” Dijsselbloem said,

Earlier Wednesday, Prime Minister Alexis Tsipras was defiant, saying the referendum would go ahead as planned Sunday and again urging citizens to vote “No.” In a televised address to the nation, he said a “No” result would not mean that Greece would have to leave the euro, as many European officials have argued.

Rather, Tsipras insisted, it would give the government a stronger negotiating position with creditors.

“There are those who insist on linking the result of the referendum with the country’s future in the euro,” Tsipras said. “They even say I have a so-called secret plan to take the country out of the EU if the vote is ‘No.’ They are lying with the full knowledge of that fact.”

Greece is in financial limbo after its bailout program expired at midnight Tuesday, cutting it off from vital financing and pushing it one step closer to leaving the euro. It also became the first developed country to fail to repay a debt to the International Monetary Fund on time. The last country to miss an IMF payment was Zimbabwe in 2001.

Still, there was some good news: Amid more chaotic scenes outside closed banks in Athens and elsewhere, the terms of its emergency $100 billion cash support were left unchanged.

Finance Minister Yanis Varoufakis thanked the European Central Bank and its president, Mario Draghi for the decision. “This allows us to breathe. It’s a very positive move and a move of goodwill on the part of the European Central Bank,” Varoufakis told state television.

Draghi, he said, had faced down “hawks” among eurozone members who had demanded that Athens increase the collateral needed to receive continued assistance.

Sunday’s hastily called referendum is based on creditor reform proposals made last week and roundly rejected by the Greek government.

But in a letter sent late Tuesday, Tsiparis reversed course and said his government was prepared to accept the earlier proposals, subject to certain amendments on central points of contention, including pensions and tax increases. He linked acceptance of the terms to a new bailout package.

Hopes that Tsipras was softening his position — after refusing for five months to accept the proposed spending cuts — boosted markets across Europe, the United States and Asia.

But some of Greece’s main creditors — including Germany, the largest single contributor to Greece’s bailout — contended it wasn’t good enough and that a deal was impossible in any case before the referendum.

“We will wait for the referendum,” Chancellor Angela Merkel told the German Parliament. “There can be no negotiations on a new aid program before the referendum.”

French President Francois Hollande urged an agreement before then, saying it was the responsibility of other countries that use the shared currency to keep Greece in the eurozone.

“We have to be clear. An accord is for right now, it will not be put off,” said Hollande, a Socialist who has been one of the few remaining EU allies of Greece’s leftist government.

“It is our duty to keep Greece in the eurozone,” he said. “That depends on Greece … but it also depends on us.”

The head of a top European intergovernmental institution, meanwhile, questioned whether Sunday’s referendum would meet international standards that call for at least two weeks’ notice to allow for discussion, crafting a clear question to be put to voters and for inviting international observers to monitor the vote.

Sunday’s vote “has been called on such a short notice that this in itself is a major problem,” Council of Europe chief Thorbjorn Jagland told The Associated Press. He said the question being put to the people was “not very clear” and his agency, which monitors votes, had not been invited to do so.

With its economy teetering near the abyss, Greece suffered its fourth downgrade this week when Moody’s rating agency slashed its rating further into junk status, just above default. The agency said Greece was likely to default on its remaining privately held debt due to its impasse with lenders.

The country has put limits on cash withdrawals to keep banks from collapsing after Greeks rushed to pull money out of ATMs following the referendum call at the start of the weekend.

In Athens, crowds of anxious elderly Greeks thronged banks before dawn Wednesday, struggling to withdraw the maximum 120 euros ($134) for the week after the government reopened some banks to help pensioners who don’t have bank cards. Greeks are now limited to daily ATM withdrawals of 60 euros ($67) and cannot send money abroad without special permission.

With many elderly Greeks unable to access any money without bank cards, the government said about 1,000 bank branches would open for three days starting Wednesday to give them access to some cash.

But a seeming last-minute decision to serve customers on an alphabetical basis led to chaotic scenes of confusion and anger, with many pensioners waiting hours to eventually be told they would have to return Thursday or Friday.

Others were told their pensions had not yet been deposited and they would therefore have to return later in the week.

“It’s very bad,” said retired pharmacy worker Popi Stavrakaki, 68. “I’m afraid it will be worse soon. I have no idea why this is happening.”

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Derek Gatopoulos in Athens, Geir Moulson in Berlin, Angela Charlton in Paris and Gregory Katz in Athens contributed to this report.

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