Sarkozy urges Europe not to "yield" to Greece

(MADRID) - Former French President Nicolas Sarkozy on Monday urged the European Union not to "yield" to Greece following the break up of talks between Athens and its international creditors.

"If Europe, the euro give the impression of yielding, it's the credibility of the entire European system that will be swept away," he said during a visit to Madrid.

"Due to the irresponsibly of its prime minister, Greece has suspended itself from the eurozone," he added.

Greek Prime Minister Alexis Tsipras blindsided creditors by calling a referendum for July 5 on austerity conditions in the latest bailout proposal being offered to Greece.

The move was interpreted by the creditors as Greece's desire to break off negotiations.

Late on Sunday Greece announced capital controls to prevent banks from collapsing, which have left many Greek depositors scrambling for cash.

The breakdown in talks with Athens' creditors pushed Greece closer to a potential exit from the European single currency, and has confronted the eurozone with a rupture unprecedented since its launch in 1999.

"What cynicism, what demagoguery, what irresponsibility," Sarkozy said in a reference to the Greek prime minister's referendum decision.

"The question is no longer about how to save Greece but about how to save the eurozone," he added.

The creditors want Greece to cut pensions 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

Sarkozy returned to frontline politics last year and is expected to seek another run for the presidency in 2017.

His scandal-tainted opposition Union for a Popular Majority party changed its name to "The Republicans" last month in an attempt to improve its image.