Grexit threat puts Europe in tricky position after 'No' vote

(PARIS) - Vote 'Yes' or leave the euro: European leaders talked tough ahead of Greece's momentous referendum, but that threat could seriously complicate a return to the negotiating table after Greeks said an emphatic 'No' to more austerity.

Ahead of Sunday's referendum European politicians had queued up to take an uncompromising line, warning that a 'No' vote could bring dire consequences.

European Commission chief Jean-Claude Juncker had declared that a 'No' vote would be a "no to Europe".

Other leaders had piled on the pressure too, with French President Francois Hollande saying the referendum was a vote on whether or not to leave the eurozone, while Italian Prime Minister Matteo Renzi equated it with a straight choice between the euro and the drachma.

To commentators sympathetic to Greece's plea that austerity has been strangling its economy for years, the 'No' vote was a brave refusal by Greeks to give in to European "bullying".

"We have just witnessed Greece stand up to a truly vile campaign of bullying and intimidation, an attempt to scare the Greek public, not just into accepting creditor demands, but into getting rid of their government," wrote Nobel Prize-winning economist Paul Krugman, a prominent critic of austerity.

"It was a shameful moment in modern European history, and would have set a truly ugly precedent if it had succeeded."

The European threats clearly fell on deaf ears with 61 percent voting 'No' and rejecting the bailout terms proposed by Greece's creditors.

But the question now is where do Greece and its creditors go from here.

As the thumping victory of the 'No' camp became clear, German vice chancellor Sigmar Gabriel declared that Greek Prime Minister Alexis Tsipras had "torn down the last bridges which Europe and Greece could have crossed to find a compromise".

Germany's government on Monday dismissed Athens' bid to clinch a quick new debt deal, saying it was "up to Greece" if it wanted to stay in the eurozone.

But France, Italy and Spain adopted a more conciliatory tone, with Renzi saying that Europe needs to "talk not only about austerity and balance sheets but about growth, infrastructure".

New proposals from Athens are due to be presented at a hastily-called eurozone summit on Tuesday.

Tsipras has said the referendum result dramatically bolsters his negotiating position, and it is unclear how much he will now be willing to bend.

- 'Complete collision' -

French political scientist Gael Brustier said that to move forward there needs to be a mediator between Greece and its toughest critics within Europe. France and Italy, seen as more sympathetic to the Greek position than intransigent Germany, are the likeliest candidates, he said.

"This is a jump into the unknown," said Brustier.

He characterised the drama as a standoff between two opposing forms of logic: Europe's approach, based on "a highly codified culture of consensus, a sense of European decency"; and the approach of Tsipras's government, which he sees as being in "complete collision" with Europe's.

When European leaders come face to face with Tsipras's radical leftist Syriza party, Brustier added, they are confronting "the unknown -- a different generation, who've had a different kind of political schooling".

Hans Stark, a researcher at the French Institute of International Relations, said that dialogue could resume if "both parties agree to some movement".

"Europe's history is one of compromise -- shaky and artificial compromise, but compromise nonetheless," he said.

"Greece has to accept that it cannot have everything."

As for Greece's toughest sparring partner Germany, Stark wagered that the country is "not ready to assume responsibility for forcing Greece from the euro".

German Chancellor Angela Merkel can afford to lose a little public support on the issue "without compromising her re-election in 2017", he added.

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