* July 5 referendum may decide Greece’s future in euro
* Greece poised to default on IMF loan Tuesday
* Government urging ‘No’ to austerity, yet ‘Yes’ to euro
By Lefteris Papadimas
ATHENS, June 29 (Reuters) - Thousands of Greeks rallied on Monday behind a ‘No’ vote in a referendum called for July 5 on the terms of an aid deal offered by Greece’s international creditors, a result that risks pushing Athens out of Europe’s currency union.
With Greece set to default on a 1.6-million-euro loan repayment to the International Monetary Fund on Tuesday, at least 20,000 defiant supporters of Alexis Tsipras’ left-wing government packed the main avenue in front of parliament, rallying behind his call to reject the package and more austerity.
Greece’s European partners have said this could see the country slide from the 19-nation euro zone, with unforeseeable consequences for Athens and for Europe’s grand project to bind its nations into an unbreakable union by means of a common currency.
Tsipras is telling Greeks a ‘No’ vote does not necessarily mean a euro exit. But economists, and Greece’s European partners, say he is understating the danger.
Many banners declared simply “No!” Others said, “Our lives do not belong to the lenders” and “Don’t back down”.
“I left Greece two years ago because I couldn’t get a job,” said Thanos Tsapelis, 37 and newly married on Sunday to Eleni, a teacher at a Greek school in Britain. “We want austerity to end so we can return to Greece and find a job.”
Tsipras, 40, stunned European leaders in the early hours of Saturday by rejecting the demands of lenders in the European Union and International Monetary Fund, and saying he would put them to the people.
The creditors wanted Greece to cut further outgoings and raise taxes in ways that Tsipras has long argued would deepen one of the worst economic crises of modern times, in a country where a quarter of the workforce is already unemployed. Pensions and wages have been hammered.
The euro zone refused to extend Greece’s existing bailout until after the July 5th vote. Athens on Sunday imposed restrictions on bank transactions and closed banks for the week to head off a run on deposits.
A ‘Yes’ vote would pile pressure on Tsipras to resign, opening the door to new elections and possibly a return to the negotiating table with creditors. (Writing by Matt Robinson; Editing by Angus MacSwan)