Pressure mounts on Greece before Sunday referendum

A leading Greek newspaper is urging Prime Minister Alexis Tsipras to call off this weekend's referendum on the bailout package the cash-strapped country's creditors have offered, arguing that the vote was "pointless" since European officials rejected his latest concessions as insufficient.

"If Mr. Tsipras and his government want to preserve [their] last shred of dignity and seriousness, all that they have left to do is to cancel Sunday's referendum now,"opined To Vima, a popular daily center-left newspaper. "It is time to assume responsibilities, before the catastrophic consequences of the default are activated."

Tsipras is calling on his fellow citizens to vote "no" in the hastily called election, arguing that the widely held view that such a result would lead to Greece's exit from the euro is wrong. In a televised speech Wednesday, Tsipras contended a vote against the bailout would strengthen his bargaining position with the country's creditors. Austerity policies backed by Greece's creditors must end, he said.

It's unclear how many Greeks agree with Tsipras. A poll published in the Efimerida ton Syntakton newspaper found that 54 percent of likely voters would vote "no" on the ballot question with 33 percent in favor. The gap, however, appeared to be narrowing.

"At this point, the whole issue has evolved more into a political question," Bob Murphy, an economics professor at Boston College, said. "If they vote 'no,' it's hard to see how he [Tsipris] backs down."

German Chancellor Angela Merkel, whose country is Greece's largest creditor, vowed not to offer any concessions to Greece until after Sunday's vote. The Greek government skipped a payment to the International Monetary Fund due Tuesday, when the country's bailout package also expired.

Economists have likened conditions in Greece to the Great Depression in the U.S., with Greek unemployment topping 25 percent.

Greek banks have been closed to most customers this week, although pensioners are being allowed to withdraw limited amounts. Business activities have ground to a halt since they lack access to credit.

Pain in the streets in Greece as financial crisis unfolds

There is concern the economic crisis will hurt Greek's lucrative tourism industry. Cruise operators Carnival (CCL) and Royal Caribbean (RCL) said they are continuing to call on Greek ports while monitoring the situation.

"Some businesses in Greece may refuse credit card purchases," a Royal Caribbean spokeswoman emailed. "We have secured enough euros in our ships' ATMs to supply our guests during this time period."

Even if Greece manages to avoid defaulting on its international debt obligations, credit conditions in the country won't return back to their pre-crisis levels anytime soon, according to economists, some of whom believe Greece's debt levels are unsustainable and a portion should be forgiven.

Those pleas have been rejected even as Tsipras continued to press for them. Many of Greece's creditors are eager for a less strident negotiating partner than Tsipras, who was elected on an anti-austerity platform.

"From the European authorities' point of view, regime change' is the only logical strategy," Mark Weisbrot, the co-director of the Center for Economic Policy Research, wrote in an article in the Global Mail. "So the European authorities continue to take steps to undermine the Greek economy and government, hoping to get rid of the government and get a new one that will do what they want."

Greece's economy -- which economists had expected to grow this year -- is now in recession. Unless an agreement is reached soon, the missed IMF payment may be the least of Greece's problems.

"Greece's debt burden is so high that a substantial default (not just a few missed payments to the IMF) is inevitable," Capital Economics wrote in a note. "Some form of short-term political fix in the coming days might delay this for a while, but only at the cost of additional and counter-productive austerity."