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Oxi: EU stunned as Greeks back Alexis Tsipras with emphatic no to bailout austerity

By Ian Johnston

The people of Greece presented the European Union with the greatest political crisis in its history last night, after they decisively rejected years of further austerity and in effect dared Brussels to throw a member state into the economic abyss.

The Syriza-led government in Athens celebrated what it called a victory of democracy over economic "terrorism", as early results of a referendum showed that Greeks had overwhelmingly voted against the demands of the country's hated creditors.

Such rhetoric has done little to endear Athens to the mainly German and French politicians it will now have to persuade to save the country's economy. Germany's Vice-Chancellor, Sigmar Gabriel, warned that Greece was heading for "bitter abandonment and hopelessness" after the vote.

The result - with more than 60% voting No - represents a sensational victory for the country's radical left Prime Minister Alexis Tsipras, who had gambled all on the referendum. Last night, he thanked voters for making a "very brave choice" and said the result showed "democracy won't be blackmailed".

In London, David Cameron will meet Chancellor George Osborne, Bank of England Governor Mark Carney and other senior officials to discuss the likely impact on the UK.

On the streets of Athens, the mood was a mix of celebratory defiance and fatalism. Thousands of people flooded into Syntagma Square, waving flags, blowing whistles and chanting.

"I feel joy and satisfaction," said Maria Siamaki, an unemployed secretary.

"I don't care if I'm hungry tomorrow or if we go bankrupt, I don't care. I have a kid who is sick and I might not be able to take care of [the child]. But I don't care, we're finding again our lost pride and dignity and that's the most important thing."

European officials had lined up all last week to warn a No vote would mean exit from the euro, but Greece's voters decided to call what Syriza insisted was a bluff. As European investors brace for tumbling stock markets today, the German Chancellor, Angela Merkel, and French President, François Hollande, who spoke by phone last night, will meet in Paris and may take one of the most important decisions in EU history.

They will face a choice of either swallowing their pride, putting European solidarity first and making a deal that would see their own taxpayers lose out; or cutting Greece off, forcing it to start printing its own currency as the euros run out.

The country's financial institutions had a lending reserve of €500m (£356m) yesterday and may not be able to dispense any more euros by midweek unless they receive emergency funding the European Central Bank.

It would also mean that debt relief would be "on the negotiating table", he insisted, something that eurozone leaders have previously resisted. Greece owes about €323bn, about 60% of which is owed to eurozone countries.

Antonis Samaras, the former Greek Prime Minister, announced his resignation as leader of the main opposition New Democracy party as the result became clear. He urged Greeks to push the government to make a quick deal with its creditors.

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