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Fearing euro exit, thousands of Greeks rally for 'Yes' vote

ATHENS (Reuters) - Thousands of Greeks worried about the prospect of crashing out of Europe’s currency union rallied in Athens on Tuesday behind a “Yes” vote in a referendum on whether to accept tough terms demanded by creditors to keep the country afloat.

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One banner read: “We will not become the last Soviet state”. Many carried flags of the European Union. They chanted “Greece, Europe, democracy!”

Turnout was comparable to the “No” camp’s own rally a day earlier in support of left-wing Prime Minister Alexis Tsipras, when tens of thousands swarmed to the main Syntagma square in front of parliament.

Greece faces defaulting at midnight on a loan repayment to the International Monetary Fund after the collapse of negotiations with creditors at the weekend on a new aid programme.

Tsipras called a referendum on the creditors’ offer for July 5, and has told Greeks to vote ‘no’.

While many Greeks believe the creditors’ demand of tax hikes and pension cuts would harm a country suffering from one of the worst economic depressions of modern times, others fear rejection of the offer could set in chain an even more damaging departure from the common currency.

“It’s going to be difficult either way but with Europe we have a better future,” said 24-year-old graduate student Paula Papagiannopoli. “I feel a sense of insecurity; I don’t know if we’ll have any money or any work in the future.”

European leaders are telling Greeks that rejection of austerity would send Greece crashing out of the 19-nation euro zone and condemn it to even greater economic and social turmoil. A “Yes” vote may unseat Tsipras and open the door to fresh negotiations on a new aid programme.

There have been no published opinion polls to suggest which way the vote may go. A majority of Greeks have long said they favour staying within the euro zone, a result Tsipras says remains his aim despite the warnings from Brussels.

“Things are difficult these days for all people but it’s fundamental for us to stay in Europe,” said nursing student Irene Mathioudaki, 21. “Europe has given us a difficult deal but a euro exit would be the worst thing.”

Writing by Matt Robinson; Editing by Peter Graff