By Nektaria Stamouli in Athens and Bertrand Benoit and Andrea Thomas in Berlin
Greece's Prime Minister Alexis Tsipras tried to convince voters
he could quickly secure a better deal with creditors if his nation
rebuffed their previous demands in Sunday's referendum, in an
effort to sway Greeks who fear a "no" vote would instead mean exit
from the euro.
In a television interview broadcast late Thursday, Mr. Tsipras
stepped up his call for Greeks to reject lenders' terms in the
referendum and said the country would have a bailout deal within 48
hours after the vote if they did.
"If 'no' wins, I can assure you that the next day I will be in
Brussels and there will be a deal," he said.
Mr. Tsipras's pledge flies in the face of warnings from European
creditors led by Germany, who say that a "no" vote would severely
harm the chances for a deal and could increase the prospect of
Greek bankruptcy and euro exit.
Complicating the picture, the International Monetary Fund warned
in a review of Greece's financial outlook that the country needed a
comprehensive debt restructuring by the eurozone, and additional
bailout cash totaling more than EUR60 billion ($66.5 billion)
through 2018, to return the country back to health.
The IMF's message: Greece's economic situation has considerably
worsened thanks to the escalating conflict with creditors, and any
new rescue deal that involves the fund will require greater
financial generosity from Europe than it has been willing to
countenance so far.
The referendum, which could determine whether the country leaves
the euro or embarks on further difficult negotiations, is splitting
the country and spreading dissent inside the Greek government as
the country faces a potentially devastating bankruptcy. Eurozone
finance ministers say there will be no further bailout talks until
after the vote. Even if Greeks vote "yes," the road to a financial
rescue for Greece could be long and painful.
A shorter version of the IMF's debt review, leaving out some of
its bleaker predictions, is one of the two documents that Greeks
are voting on in Sunday's referendum.
"The referendum is the last stop before the final deal," Mr.
Tsipras promised voters, adding that "the bigger the 'no' the
better the deal" his country would get.
Mr. Tsipras's view that he'd be able to strike a deal
immediately after a "no" vote isn't shared elsewhere in Europe.
Officials from Germany and other creditors have said that
Greece's next bailout program--if there is one--would require
tougher measures than those Greeks would have rejected in a "no"
vote, because the country's economic outlook is deteriorating due
to its closed banks and capital controls.
Also, an entirely new application for a rescue from the eurozone
bailout fund, the European Stability Mechanism, would now be needed
because Greece's old bailout expired on Tuesday. Such an
application would require evaluations and parliamentary debates in
Germany even before new talks could start.
In addition, Mr. Tsipras is now seen in Berlin and other
eurozone capitals as an unpredictable leader--especially since his
call for a "no" vote against creditors' demands--and one who can't
be relied upon to overhaul Greece's economy as a new bailout deal
would require. Any new rescue program with the Tsipras government
would be politically hard to sell in many creditor countries.
Greek Finance Minister Yanis Varoufakis, speaking on Bloomberg
Television, expressed optimism that Greeks would follow the
government's recommendation. He said he wouldn't stay on as finance
minister if Greeks voted "yes" in the referendum, making clear the
government's future hangs in the balance.
"I personally won't sign another extend and pretend," he
said.
Protracted negotiations mean Greece might not get any more
funding before July 20, when it must repay more than EUR3 billion
in bonds held by the European Central Bank or face a second
multibillion default on its debt within 20 days.
Greece became the first developed country to default on the IMF
after it missed a $1.73 billion rescue-program payment on
Tuesday.
Resistance to any more aid for Greece is growing in Germany's
parliament, which must approve bailout financing.
Gunther Krichbaum, a lawmaker for German Chancellor Angela
Merkel's Christian Democratic Union and head of parliament's
European Union Affairs Committee, argued Greece wasn't even
eligible for a fresh bailout program, which Athens requested on
Tuesday.
To qualify for aid under the rules of eurozone's bailout fund,
Greece would need to show that its debt is sustainable and that it
only faces a liquidity crunch. In addition, failure to secure such
aid would have to pose a danger for the financial stability of the
entire eurozone.
Mr. Krichbaum said Greece satisfied none of these conditions
since it had already defaulted to the IMF, and because most
economists believe the ECB's bond-buying program insulates other
eurozone members from the fallout of further Greek defaults.
Meanwhile in Greece, politicians from outside the governing
left-wing Syriza party urged Greek voters to say "yes" to
creditors' terms in the referendum, to safeguard the country's
place in the eurozone.
Greek President Prokopis Pavlopoulos argued that the country's
only option is Europe and the eurozone. "The referendum serves
democracy only if it is taking place under conditions that don't
allow division," Mr. Pavlopoulos said on Thursday. Former Greek
prime ministers Costas Karamanlis and Costas Simitis--who oversaw
the country's entry into the common currency--also threw their
support behind the "yes" vote.
And in a sign of the bubbling dissent in the ruling coalition,
five lawmakers from Syriza's junior coalition partner, Independent
Greeks, distanced themselves from the government position on
Thursday. Some said they intended to vote "yes" in the referendum,
while others called on the government to cancel it.
Jeroen Dijsselbloem, the Dutch finance minister who presides
over meetings of eurozone finance chiefs, said a "no" vote wouldn't
entail Greece automatically leaving the common currency. But he
stressed it would be an illusion for voters to believe that by
voting "no," Greece would be in a position to negotiate a better
bailout package.
Andrea Thomas in Berlin, Ian Talley in Washington and
Archie van Riemsdijk
in Amsterdam contributed to this article.
Write to Nektaria Stamouli at nektaria.stamouli@wsj.com,
Bertrand Benoit at bertrand.benoit@wsj.com and Andrea Thomas at
andrea.thomas@wsj.com