GREEK Finance Minister Yanis Varoufakis has resigned amid the crisis engulfing the debt-ridden nation and after pressure from Greece’s European partners.

The Australian dual national citizen used his personal blog to announce he was stepping down, in the wake of the country’s ‘No’ vote, revealing his resignation under a post entitled ‘Minister No More!’

Varoufakis wrote that he had been “made aware of a certain preference by some eurogroup participants, and assorted ‘partners’, for my… ‘absence’ from its meetings”.

media_camera Gone ... Greek Finance Minister Yanis Varoufakis has dramatically resigned.

The controversial figure, who effectively backed himself into a corner on aid negotiations in recent days after accusing creditors of “terrorism”.

“I consider it my duty to help (PM) Alexis Tsipras exploit, as he sees fit, the capital that the Greek people granted us through yesterday’s referendum. And I shall wear the creditors’ loathing with pride,” Varoufakis wrote.

He said as a Leftist he would always act collectively with no care for the privilieges of office and praised Greeks for their sacrifice.

“The superhuman effort to honour the brave people of Greece, and the famous OXI (NO) that they granted to democrats the world over, is just beginning,” he wrote in his resignation statement.

media_camera Stepping down ... Greek Finance Minister Yanis Varoufakis leaves his office on Sunday before his resignation announcement.

The charismatic 54-year-old Varoufakis had only just been appointed this year and had a scratchy relationship not just with EU counterparts but also with those in his own ministry but his resignation now took many by surprise. The economist taught as a senior lecturer at Sydney University between 1989 and 2000. He left Australia citing his abhorrence to the “conservative turn” of the nation. His first wife and daughter still live in Australia.

He had had a privileged life but that did not stop him becoming a libertarian Marxist and he credited Marx with framing his perspective on the world.

Meanwhile, nore than $30 billion has been wiped off the Australian stock market as fears grow that Greece is headed for a messy exit from the euro zone after the country rejected its creditors’ proposed austerity measures.

The ASX/S&P 200 and All Ordinaries fell by 1.7 per cent in early Monday trade in response to the resounding ‘No’ vote to the austerity measures, which many see as a vote against the country’s membership in the euro zone.

Meanwhile, the Australian dollar dropped to a six-year low of 74.52 US cents before recovering slightly.

media_camera Nation in crisis ... Greek Prime Minister Alexis Tsipras speaks during a televised address to the nation in Athens.

Greeks delivered a stunning rebuke to Europe at the highly-anticipated referendum overnight, with 61 per cent backing the ‘No’ campaign advocated by the ruling Syriza campaign.

The move caught markets by surprise and significantly increased expectations Greece would leave or be forced out of the euro zone.

media_camera Chaos ... People light red flares while celebrating the 'No' victory in Athens.

Investment bank JP Morgan now says there is a two-in-three chance of the country leaving the euro zone.

“This is a path that suggests to us that there is now a high likelihood of Greek exit from the euro, and possibly under chaotic circumstances,” it said in a research note.

media_camera Bailout rejected ... Greek parliament's president and Syriza party member, Zoe Kostantopoulou takes a photo with a ‘No’ supporter.

Every sector of the Australian market was deep in negative territory, with the exception of gold miners.

Gold tends to do well during times of uncertainty due to the metal’s reputation as a “safe haven” asset.

IG Market strategist Evan Lucas said the market sell off would be considerably worse if not for expectations that Chinese stocks will rally following the announcement of new emergency measures. The country has moved to prop up its ailing share market, which has lost 26 per cent in the past fortnight, by suspending new listings and enlisting the help of its top stock brokers, which have agreed to collectively buy at least 120 billion yuan ($A25.56 billion) of shares.

“Clearly China has got every reason to have a positive day today, if it is not supported today then we’ve got some serious problems,” he said.

LEADERS REACT

European leaders are scrambling for a response after the resounding “No” from Greek voters.

German Chancellor Angela Merkel was to meet with French leader Francois Hollande in Paris after Greece overwhelmingly rejected international creditors’ tough bailout terms Sunday.

The pair spoke by telephone late on Sunday, declaring the decision must “be respected” and calling for an emergency eurozone summit which European Union president Donald Tusk said would be held on Tuesday.

media_camera Emergency meeting ... German Chancellor Angela Merkel is set to meet French leader Francois Hollande in Paris.

A flurry of other meetings will also be held Monday as European leaders sized up the implications of the vote, a victory for Greece’s radical left-wing Prime Minister Alexis Tsipras, who insisted it did not mean a “rupture” with Europe.

With the ramifications still unclear and some analysts putting the chances of a “Grexit” at “very high”, European Commission head Jean-Claude Juncker was to hold a teleconference on Monday morning with European Central Bank chief Mario Draghi, Tusk and Eurogroup head Jeroen Dijsselbloem.

media_camera Rejecting austerity ... Supporters of the No vote celebrate after the results of the referendum at Syntagma square in Athens. Source: AP

MARKETS ON EDGE

ANZ senior FX manager Sam Tuck said markets had adopted a risk-averse sentiment and investors on Monday would be watching for the European response.

Germany and France are calling for a special summit of eurozone leaders, as a Greek failure to reach a deal with its creditors could trigger the country’s exit from the eurozone.

“They’ve been very clear last week that a `No’ vote would not strengthen the Greek negotiating position, so they’ve got a very tough choice in front of them,” he said.

Mr Tuck said the Greek central bank had also put in a request to the European Central Bank to increase the emergency lending authority.

“That’s the only thing keeping banks afloat at the moment, so it’s going to be very interesting to see what the ECB says on that front,” he said.

Well, a clear majority in Greece doesn't want the help that other Euro countries have offered. Their choice. But tragic. — Carl Bildt (@carlbildt) July 5, 2015

media_camera Uncertain future ... People celebrate in front of the Greek parliament as Greek voters vote no in the Greek austerity referendum. Source: Getty

BUDGET CRISIS WARNING

Abbott government frontbencher Scott Morrison says events in Greece are a warning of what can happen if you don’t get your house in order. He noted Greece’s debt didn’t get to 100 per cent of GDP overnight, rather it was through unsustainable polices.

He said Greece had been aware of its financial problems surrounding an ageing population since the 1980s, and while it had undertaken significant reforms in recent years he believed it was too little, too late.

It is a “distant” warning for Australians, the social services minister told Network Ten yesterday.

“We’re seeing pictures of pensioners today in Greece crying, sitting on the streets, just in absolute despair. Well, I don’t want to see that happen to future pensioners in Australia.” That is why the Australian government is seeking to raise the pension age to 70 in 2035 to ensure the pension is there in the future.

But federal government minister Simon Birmingham says Australia is enjoying strong levels of confidence at a time of uncertainty on the other side of the world.

Today we celebrate the victory of #democracy. Tomorrow, we will all continue our national effort to reach an agreement. #Greece — Alexis Tsipras (@tsipras_eu) July 5, 2015

Mr Birmingham says business confidence and employment growth is up while government restoration of confidence in the budget is paying dividends for investment and productivity in small businesses.

“It is particularly important when you look at the result of the Greece referendum and the uncertainty on the other side of the world that we do have these strong levels of confidence in Australia,” he told Sky News this morning.

Australian National University’s Timo Henckel says Australia’s direct exposure to the Greek economy is minimal.

“(But) a complete breakdown of negotiations between Greece and the European Union, followed by a Greek exit from the euro, may have noticeable ramifications for global financial markets,” he said.

Reserve Bank governor Glenn Stevens will no doubt be keeping a wary eye on the global financial market reaction ahead of a new interest rates decision later this week..

media_camera New hope ... A boy holds a Greek national flag as people celebrate in front of the parliament after early results showed those who rejected further austerity measures in a crucial bailout referendum were poised to win. Source: AFP

GREECE ERUPTS IN ELATION

Cheering chanting Greeks crowded into central Athens last night after voting ‘No’ to further bailout austerity measures, seemingly oblivious to the threats facing the near-insolvent country.

Punching the air, the ‘No’ camp exulted as the news came through that at least 61 per cent of voters had rejected international creditors’ demands.

“I’m so happy,” said 37-year old Dima Rousso, adding that she hadn’t expected there to be such a clear margin between the ‘No’ votes and the ‘Yes’ votes.

“This is Europe’s chance to become what it should have been in the beginning,” she said.

Greece’s Prime Minister Alexis Tsipras joined the jubilation, declaring the result proved “democracy won’t be blackmailed”.

Even in the most difficult circumstances, #democracy can't be blackmailed—it is a dominant value and the way forward. #Greece #Greferendum — Alexis Tsipras (@tsipras_eu) July 5, 2015

“This is not a mandate of rupture with Europe, but a mandate that bolsters our negotiating strength to achieve a viable deal,” he said in a televised address.

The Prime Minister said the ‘No’ camp’s triumph in the crucial bailout referendum meant creditors would now be forced to address the question of easing the country’s massive debt.

“This time, the debt will be on the negotiating table,” he said in a televised address, insisting that an International Monetary Fund report seen this week “confirms Greek views that restructuring the debt is necessary”.

The euro fell 1.6 per cent in the wake of the referendum in electronic trading before recovering slightly, still down 1.2 per cent.

media_camera Celebration ... People in front of the Greek parliament as early opinion polls predict a win for the Oxi, or No, campaign in the Greek austerity referendum. Source: Getty

media_camera Burdened ... Girls celebrate with Greek national flags in front of the parliament. Source: AFP media_camera Joy ... A couple kisses as early results in the Greek bailout referendum are announced. Source: AFP

SCENES OF ELATION

Young couples kissed at the fountain in front of parliament in the symbolic Syntagma square, the scene of violent anti-austerity riots in the past, as teens drove by on scooters, blaring their horns, Greek flags held high and streaming in the wind.

MORE: What does ‘No’ mean for Greece?

“This is a victory for the Greek people, a chance for Europe,” said Giorgos, 25, who had rushed along with his girlfriend to join some 6,000 people celebrating their triumph.

“Spain, and then Portugal, should follow this path. We’re for a Europe of the people,” he said, brushing off concerns the result could see the debt-laden country plunge further into the financial mire.

media_camera Defiance ... A supporter of the No vote waves a Greek flag as a crowd celebrates after the results of the referendum in Synatagma square in central Athens. Source: AP

There was no mention of the scenes repeated across Greece this week of closed banks and food stockpiling that left supermarket shelves bare. While the future was unknown, for many celebrating on the streets it now had a fresh glow of hope.

Despite doomsayers who have warned a ‘No’ vote may well see the country crash out of the eurozone in a so-called “Grexit”, Giorgos insisted: “Greeks are not afraid”.

StateMin @Miro_SPD: Whoever cheers, hasn't understood seriousness of situation. Nothing will be easier. Least of all for Greeks #Greferendum — GermanForeignOffice (@GermanyDiplo) July 5, 2015

Support swelled for the ‘No’ camp not just because Prime Minister Alexis Tsipras called for Greeks to turn the bailout offer down, but because Europe had tried to interfere, he said.

While many of those who voted ‘No’ were youths hit by record jobless rates, there were also elderly people in the crowds, wrapped in Greek flags and dancing in time with the victory chants.

media_camera Greek sunset ... Supporters of the No vote wave flags after the results of the referendum at Syntagma square in Athens. Source: AP

An elated George Stasinopoulos, 25, grinning through his big brown beard, said “the governments of Europe don’t support us but their people do, and that gives us courage!” “I believe in Tsipras and in this government. It wants the best for us,” he said.

But the mood of jubilation was not shared by all ‘No’ voters, with some saying they had been confronted with an impossible choice.

Nika Spenzes, 33 and unemployed, was walking in the opposite direction of the party.

“I’m not happy — we cannot be happy as a nation with this unemployment and poverty. And a ‘No’ victory doesn’t mean there’s any more hope for Greece than before,” she said.

media_camera Just say ‘No’ ... A woman passes by the headquarters of Bank of Greece daubed with the word "NO" and a poster with a portrait of German Finance Minister Wolfgang Schaeuble that reads " Now tell him NO ". Source: AFP

REACTION IN EUROPE

Eurozone nations will hold a summit tomorrow to discuss the Greek referendum result, after the German and French leaders called for a meeting.

“I have called a EuroSummit Tuesday evening ... to discuss situation after referendum in Greece,” EU President Donald Tusk said on Twitter, after Greek voters overwhelmingly voted ‘No’ to creditor demands for further austerity.

German Chancellor Angela Merkel has discussed the outcome of Greece’s referendum with French President Francois Hollande in a telephone call, with both agreeing the ‘No’ vote must be respected. Both leaders had requested the EU hold a summit on Tuesday.

“Both were in agreement that the vote by the Greek people be respected. The Chancellor and the President are in favour of calling for a summit of eurozone heads of state and government heads on Tuesday,” a spokesman said.

media_camera Rock solid ... A person holds a Greek national flag after climbing a monument during a rally rejecting further austerity measures in a Greek bailout. Source: AFP

Meanwhile, in a brief statement the European Commission said it “respects” the result of the Greece bailout referendum.

Commission president Jean-Claude Juncker will hold a teleconference later today with European Central Bank chief Mario Draghi and Jeroen Dijsselbloem, the head of the Eurogroup of eurozone finance ministers.

Juncker will also be “consulting tonight and tomorrow with the democratically elected leaders of the other 18 eurozone members as well as with the heads of the EU institutions”, the statement added.

“The European Commission takes note of and respects the result of the referendum in Greece,” the statement said.

But Eurogroup chief Dijsselbloem described Greece’s ‘No’ vote as “very regrettable”.

“I take note of the outcome of the Greek referendum. This result is very regrettable for the future of Greece,” the Dutch finance minister said in a statement.

media_camera Victory ... Greek Prime Minister Alexis Tsipras speaks to the press after placing his vote in the austerity referendum. Source: Getty

OPPOSITION LEADER RESIGNS

Greece’s conservative opposition chief Antonis Samaras has announced his resignation after the country was on course to soundly reject further austerity cuts in a referendum. “I understand that our great movement needs a new start. From today I am stepping down from the leadership,” the New Democracy chief, a former prime minister, said in a televised address on Sunday.

Samaras, 64, had faced calls to resign in January after his party was beaten in national elections by the radical leftist Syriza party of Prime Minister Alexis Tsipras.

Samaras’ term was originally to end in 2016, but his fragile coalition failed in December to elect its candidate for Greek president, triggering an early ballot.

The New Democracy party had campaigned for a ‘Yes’ result in Sunday’s referendum, echoing warnings from European officials that a rejection of EU-IMF reform proposals could see Greece crash out of the eurozone.

media_camera Path chosen ... A man enters a polling station during the Greek referendum. Source: AFP

ON THE BRINK

Greece is teetering on the brink of financial collapse. If it doesn’t receive cash and loans soon from European institutions, it could still be forced to resort to government IOUs or a return to drachmas to keep its economy running.

Last Tuesday, the country defaulted on a 1.5-billion-euro repayment to the IMF, becoming the first developed country to fall into arrears to the institution. As a result, it is cut off from further IMF financing until it settles the amount.

The same day, the last bailout for Greece ran out, despite Tsipras’s appeals for it to be extended until the referendum was over.

Greece was officially declared in default on Friday by the European Financial Stability Facility, which holds 144.6 billion euros ($A212 billion) of Greek loans.

Greek banks are now reportedly almost illiquid after a bank run by panicked customers in the lead-up to the referendum, which Tsipras abruptly called on June 27 to break an impasse with the creditors.

FM #Steinmeier: Have to accept #Grefenderum outcome.Now mainly up to #Greece to decide about consequences to be drawn. Ball in Athen's court — GermanForeignOffice (@GermanyDiplo) July 5, 2015

weeklong closure of the banks and capital controls that included restricting daily ATM withdrawals to just 60 euros ($A98) and blocking money transfers abroad slowed the outflow.

But if the ECB doesn’t inject emergency euros into Greece’s banks in the next one or two days, more businesses will go belly up and ordinary Greeks will suffer. Already, there have been heartbreaking scenes of pensioners in despair at not getting access to their accounts.

Government spokesman Gabriel Sakellaridis said late yesterday that the Bank of Greece was asking for ECB to provide money under its Emergency Liquidity Assistance mechanism.

Reacting to the referendum outcome, analysts at Barclays Research said a Grexit was now “the most likely scenario”, while Deutsche Bank said the decisive ‘No’ meant the “probability of unpredictable outcomes to the Greek crisis has again materially increased”.

Originally published as Greek Finance Minister steps down