By Lefteris Karagiannopoulos and George Georgiopoulos ATHENS, July 3 (Reuters) - Prime Minister Alexis Tsipras rejected European warnings that Greeks will be deciding on their future in the euro zone in a referendum on Sunday, saying negotiations would continue for a better deal with international creditors after the vote. In a televised address on Friday, Tsipras said a report by the International Monetary Fund which arguing that Greece's massive public debt could not be sustained without significant writedowns vindicated his advice to reject the lenders' terms. Repeating his assault on European partners he accused of blackmailing and issuing ultimatums to Greece, the leftist leader called for calm ahead of Sunday's ballot, as two opinion polls showed the 'Yes' and 'No' camps neck-and-neck. "On Sunday what is at stake is not Greece's membership of Europe, what is at stake is whether blackmail will lead us to accept the continuation of a policy which the lenders themselves recognize is a dead end," he said. "On Sunday what is at stake is whether we will give our consent to the slow death of the economy." European policy makers fired fresh warnings of the costs of a 'No' vote in a plebiscite called at just eight days' notice after the breakdown of talks with the European Commission, the IMF and the European Central Bank. Commission President Jean-Claude Juncker and German Finance Minister Wolfgang Schaeuble dismissed Tsipras' version that his government would be able to move smoothly to negotiate more favorable terms if Greeks backed his rejection. "If the Greeks will vote 'No', the Greek position is dramatically weakened," Juncker told a news conference. Schaeuble, a hate figure for Greek opponents of austerity policies, told Bild newspaper: "Greece needs reforms. But I already know now: These would be very difficult negotiations." Greek riot police block the entrance of the Federation of Greek Industries during a demonstration in Athens on July 3, 2015. (ANGELOS TZORTZINIS/AFP/Getty Images) BRINKMANSHIP Tsipras is betting Europe will compromise rather than let Greece slip out of the eurozone, even though the continent's leaders say a "No" vote would signal its exit. But behind the rhetoric, there were more concrete signs of the pressure Europe can exert on Greece. The euro zone's rescue fund, Greece's largest creditor, said it was reserving the right to call in 130.9 billion euros of debt ahead of time after Athens defaulted on an IMF loan. One poll by the respected ALCO institute, published in the Ethnos newspaper on Friday, put the 'Yes' camp on 44.8 percent against 43.4 percent for the 'No' vote. But the lead was well within the pollster's 3.1 percentage point margin of error, with 11.8 percent saying they are still undecided. Another survey for Agvi newspaper put the 'No' fractionally head with 43 percent to 42.5 percent for the 'Yes' and 9 percent undecided. Given a volatile public mood and a string of recent election results that ran counter to opinion poll predictions, the result is in effect completely open. With banks shuttered all week, cash withdrawals rationed and commerce seizing up, the vote could decide whether Greece gets another last-ditch financial rescue in exchange for more harsh austerity measures or plunges deeper into economic crisis. There has been little time for campaigning but Tsipras is due to address a mass rally of 'No' supporters in Athens' central Syntagma Square outside parliament on Friday evening, while 'Yes' campaigners plan a rally at the old Olympic Stadium. Tsipras opponents have pointed to the fact that the referendum is on a deal that is no longer on the table accusing him of recklessly endangering the country's future. The 'No' campaign has directed much of its venom at Germany, the euro zone's dominant power and Greece's biggest creditor. One poster plastered in central Greece shows a picture of German Finance Minister Wolfgang Schaeuble with the slogan: "For five years he's been sucking your blood. Tell him NO now." The Council of State, Greece's highest administrative court, is to decide on the constitutionality of the referendum at a hearing on Friday. The Council of Europe, a pan-European democracy and human rights watchdog, has said the vote does not meet its minimum standards. Two Greek citizens are seeking the suspension of the vote as unconstitutional and illegal, arguing that it was called at too short notice, that the constitution bars questions relating to fiscal policy, and that the question is too complex. Supporters of the Greek Communist Party shout slogans during a demonstration outside the Federation of Greek Industries in Athens on July 3, 2015. (ANGELOS TZORTZINIS/AFP/Getty Images) FINANCIAL HOLE The IMF warned on Thursday that Greece faces a huge financial hole regardless of the outcome of the referendum and would need some 50 billion euros as well as a massive debt writedown. The assessment, in a preliminary draft of the Fund's latest debt sustainability report, underlined the scale of the problems facing Athens, whatever government ends up dealing with them. Tsipras may not survive long if voters ignore his call to vote 'No'. But even if European leaders are willing to sit down immediately with an Athens government, it may be several weeks before a new bailout is sorted out, European Commission Vice-President Valdis Dombrovskis told Germany's Die Welt daily. Any decision on whether to reopen the crippled banks will depend on whether the European Central Bank is ready to restore the emergency funding they need to stay afloat. That is far from certain as ECB Governing Council member Vitor Costancio made clear when asked whether funding would be restored. "I cannot in advance answer that question," he said, adding that a 'No' vote would make agreement difficult. "If the result will be a 'Yes', then it's the opposite: it seems it will be easier to reach an agreement," he said. Greece's European partners have made clear they regard the vote as a choice of whether Greeks want to stay in the euro, even though its exit would change the nature of a 15-year-old currency union intended to be unbreakable. But as the deadline approached, some officials appeared to recognize that after five years of bailout-imposed austerity, even those Greeks who intend to vote 'Yes' have little appetite for yet more advice from abroad. "It's for Greeks to decide," said Jeroen Dijsselbloem, chairman of the Eurogroup of euro zone finance ministers when asked by reporters how Greeks should vote. "It's important for Europe, but important above all for Greece." If voters back a bailout plan the government has scorned, Tsipras and Finance Minister Yanis Varoufakis have said they would quit. That would lead to a scramble to either try to put together a national unity government to negotiate a loan deal or call new elections by September. Already, Tsipras' coalition is under strain as a succession of deputies from the right-wing Independent Greeks, his junior partners, have backed the 'Yes' vote. Varoufakis, who alienated many euro zone colleagues with his economic lectures and outspoken style, said the IMF's report vindicated Greece's demands to put debt relief at the center of the negotiations. "It is music to our ears because what we have been saying right from the beginning is that the great, big reason why we have a huge crisis here in Greece is because our debt is unsustainable," he told Irish radio. (Additional reporting by James Mackenzie in Athens, Julien Ponthus and Ingrid Melander in Paris and David Chance in Washington; Writing by Paul Taylor and James Mackenzie; Editing by Catherine Evans and Philippa Fletcher) -- This feed and its contents are the property of The Huffington Post, and use is subject to our terms. It may be used for personal consumption, but may not be distributed on a website.
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