ATHENS — Europe will lose a trillion euros if it allows Greece to go under, the country's finance minister said on Saturday, accusing creditors of "terrorizing" Greeks into accepting austerity in a referendum on bailout terms.
After a week in which Greece defaulted, closed its banks and began rationing cash, Greeks vote on Sunday on whether to accept or reject tough conditions sought by international creditors to extend a lending lifeline keeping the country afloat.
Addressing a crowd of over 50,000 in central Athens, left-wing Prime Minister Alexis Tsipras urged them to spurn the deal, rejecting warnings from Greece's European partners that this may bring an exit from the euro and even greater hardship.
Tsipras' finance minister, Yanis Varoufakis, said there was too much at stake for Europe to cast Greece adrift.
"As much for Greece as for Europe, I'm sure," Varoufakis told the Spanish newspaper El Mundo. "If Greece crashes, a trillion euros (the equivalent of Spain's GDP) will be lost. It's too much money and I don't believe Europe could allow it."
"What they're doing with Greece has a name: terrorism," said Varoufakis. "Why have they forced us to close the banks? To frighten people. And when it’s about spreading terror, that is known as terrorism."
Athens’ 18 partners in the euro zone say they can easily absorb the fallout from losing Greece, which accounts for barely 2 percent of the bloc's economic output. But it would represent a massive blow to the prestige of Europe's grand project to bind its nations into a union they said was unbreakable.
"For Europe, this would be easy to manage economically," Austrian Finance Minister Hans Joerg Schelling said in an interview with online newspaper Die Presse. For Greece, however, "it would indeed be considerably more dramatic."
Schelling said Greece would need humanitarian aid in case of a Grexit but described fears of widespread poverty as exaggerated and part of "a propaganda war."