Merkel, Hollande turn away from Greece as referendum die is cast

[PARIS] Angela Merkel and Francois Hollande signaled they've reached the limits of their ability to safeguard Greece, offering the Greek government no further concessions to step back from the brink.

Mr Hollande suggested that the referendum called by Prime Minister Alexis Tsipras would determine Greece's future membership in the 19-nation euro region, while Merkel said that Europe's credibility was at stake after Greece rejected the terms attached to further bailout aid.

"If the euro fails, Europe will fail," Ms Merkel said in a speech in Berlin on Monday. "That's why we have to fight for these principles. We could maybe set them aside in the short term. We could maybe say we'll just give in. But I say: in the medium and long term, we will suffer damage that way."

The leaders of Europe's two biggest economies offered no leeway to Mr Tsipras after his surprise decision to break off negotiations to resolve a standoff over aid.

While it is the sovereign right of Greece to hold the referendum, "what's at stake is serious," Mr Hollande told reporters in Paris Monday after an emergency session of ministers to discuss Greece.

"It's about knowing if the Greek people want to stay in the eurozone," he said. "That is their place, in my eyes, but it's up to them to decide. Or they take the risk of leaving."

BLOOMBERG

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