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‘No’ in referendum would weaken Greece’s position, says Dombrovskis

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A "No" in Greeces referendum on Sunday would not strengthen Athens' position in talks with its creditors as the Greek government claims, EU Commission deputy president Valdis Dombrovskis said in a German newspaper interview on Friday.

"It would be wrong to think that a 'No would strengthen Greeces bargaining position. The opposite is true," said Dombrovskis, who is the EUs commissioner for the euro and social dialogue.

The situation for Greece was "substantially worse than it was a week ago" following the shock decision by Prime Minister Alexis Tsipras to call a referendum on the terms of his country's bailout, Dombrovskis told the daily Die Welt.

Greek voters will be asked to vote either "Yes" to a bailout package offered by creditors in exchange for tougher austerity measures, or "No" in support of the leftist government's bid to gain better terms.

Tsipras called the poll on Saturday after talks between his government and lenders broke down — leading Athens to default on a loan repayment Tuesday.

European leaders have warned the vote is effectively now an in-out vote on Greeces future in the eurozone.

"The question of the referendum is neither factually nor legally correct," Dombrovskis said, explaining that the bailout package Greeks were being asked to vote on had since expired.

"Nevertheless, the Greeks will send a signal to the rest of Europe," he continued.

Even if talks were to resume, "it could take a few weeks to get a third bailout programme started. The big uncertainty factor here is whether we could agree politically," Dombrovskis said.

"Were working on keeping Greece in the euro. It would have been better if we had extended the existing loan programme. But we should focus on solving the problem rather than getting caught up in worse scenarios," he said.

[AFP]