An Ipsos poll just released shows the referendum on a knife-edge. It has yes on 44% and no one point behind on 43%, with 12% still undecided.

The number of undecided respondents underscores the significant potential for volatility, Ipsos said, describing the referendum as “too close to call”.

The poll is the fifth to be released on Friday, with the fourth also giving a narrow lead to the yes camp.

It also shows that, regardless of where they place their own support, more Greeks believe that the yes side will win than think victory will be handed to the no camp.

There are suggestions that the US pushed for the IMF report to be published this week, overcoming opposition from Europe. Here’s the Reuters exclusive:

Eurozone countries tried in vain to stop the IMF publishing a gloomy analysis of Greece’s debt burden which the leftist government says vindicates its call to voters to reject bailout terms, sources familiar with the situation said on Friday.

The document released in Washington on Thursday said Greece’s public finances will not be sustainable without substantial debt relief, possibly including write-offs by European partners of loans guaranteed by taxpayers. It also said Greece will need at least €50bn in additional aid over the next three years to keep itself afloat.

Publication of the draft Debt Sustainability Analysis laid bare a dispute between Brussels and the Washington-based global lender that has been simmering behind closed doors for months.

Greek Prime Minister Alexis Tsipras cited the report in a televised appeal to voters on Friday to say ‘No’ to the proposed austerity terms, which have anyway expired since talks broke down and Athens defaulted on an IMF loan this week.

It was not clear whether an arcane IMF document would influence a cliffhanger poll in which Greece’s future in the euro zone is at stake with banks closed, cash withdrawals rationed and commerce seizing up.

“Yesterday an event of major political importance happened,” Tsipras said. “The IMF published a report on Greece’s economy which is a great vindication for the Greek government as it confirms the obvious - that Greek debt is not sustainable.”

At a meeting on the International Monetary Fund’s board on Wednesday, European members questioned the timing of the report which IMF management proposed at short notice releasing three days before Sunday’s crucial referendum that may determine the country’s future in the euro zone, the sources said.

There was no vote but the Europeans were heavily outnumbered and the United States, the strongest voice in the IMF, was in favor of publication, the sources said.

The Europeans were also concerned that the report could distract attention from a view they share with the IMF that the Tsipras government, in the five months since it was elected, has wrecked a fragile economy that was just starting to recover.

“It wasn’t an easy decision,” an IMF source involved in the debate over publication said. “We are not living in an ivory tower here. But the EU has to understand that not everything can be decided based on their own imperatives.”

The board had considered all arguments, including the risk that the document would be politicized, but the prevailing view was that all the evidence and figures should be laid out transparently before the referendum.

“Facts are stubborn. You can’t hide the facts because they may be exploited,” the IMF source said.

IMF spokeswoman Angela Gaviria declined to comment on this report.

Helena Smith says:

The mayor of Athens George Kaminis has addressed the yes rally. He has delivered a withering critique of the government accusing it of lies and obsfucation. “They say they will reach a deal in 48 hours when no one is talking to them,” he has just told the crowd.

Over at the no rally, prime minister Alexis Tsipras addressed ecstatic supporters. He kicked off his speech saying:

“Today we are not protesting, today we are celebrating democracy, today we are celebrating the victory of democracy, whatever the result is on Monday. Today all of Europe has its eyes on you, the Greek people and on the three million impoverished Greeks. The whole planet has its eyes turned on Syntagma square in the place where democracy was born.”

The leftist firebrand then turned his fire on creditors.

“No one has the right to threaten to divide Europe,” he told the crowd. “We will tell them noon Sunday.”

Tellingly the prime minister’s speech was not relayed in its entirety by television channels. The media has not been shy about showing its political colours: they have avidly thrown their weight behind the yes vote.

He urged voters to express a “proud ‘No’ to ultimatums and those who terrorise you.”

That ends his short speech - and the concert restarts.

The Greek prime minister has told supporters that whatever happens over the weekend, this is a celebration of democracy. He said Greeks are determined to take matters into their own hands.

Sunday’s referendum is about staying in Europe, and deciding to live with dignity in Europe, he said.

Tsipras, dressed in a white shirt, has just walked up on stage and is waving to the crowd.

Helena Smith in Athens writes:

Sunday’s referendum has, almost overnight, turned into a fight for political survival for Syriza. The anti-austerity movement that took Europe by storm, when it was swept into power on the back of popular discontent in January, now faces an existential battle. “In Europe they want to squelch us because they only want one policy, the doctrine of neo-liberalism, to succeed,” the administrative reform minister Giorgos Katrougalos said earlier today.

There is growing acceptance that prime minister Alexis Tsipras’ high-stakes gamble calling the referendum may well backfire. The “yes” vote has swelled in recent days as big name political and cultural figures have come out in support. If the outcome on Sunday is a massive turnout in support for the “yes” vote, it will augur political developments with Tsipras and his radical left Syriza party possibly even having to step down on Monday. If the vote is “no,” as the government has urged, Athens’ relationship will break down further. “They have made it clear Schauble, Merkel, and others that they don’t want to deal with us,” one minister told me requesting anonymity. “It is very difficult to say if we will be here on Monday. A lot is in Tsipras’ hands. Our biggest concern, now, is the division we are seeing [between the two camps] and how we are going to handle it.”

Speculation was rampant on Friday that in the event of a resounding ‘yes’ a national unity government might have to be formed after the referendum possibly led by technocrats or figures outside the political arena. Athens’ mayor George Kaminis, a professor of constitutional law and Yannis Boutaris, the mayor of Thessakoniki, are possibilities.

“It is very difficult to see a better agreement [emerging with creditors] in the event of a ‘no’ vote,” said the political commentator Alexis Papahelas. “A ‘yes’ vote is going to be difficult and the Europeans have made a lot of mistakes but it will at least keep us at the core of Europe.”

The ‘No’ rally has turned into a music festival, punctuated by cries of ‘Ochi’. Everyone is singing along now.

More from Jon Henley in Athens:

Most people stressed they were not voting against the EU, or for a Grexit: “Just against this EU, said Malvina, 27, an engineering student. “We want the right Europe. One where all countries are equal, and treated with respect. I hope a No vote will give Tsipras a stronger position in the negotiations – that’s all.”

But if Greece did end up quitting, said Christos Mellios, who owns a small plastics factory, “maybe it wouldn’t be such a bad thing. It would be good for all of Europe to change. I don’t think anyone actually likes this Europe, what Europe has become.”

His partner, Mania Epithimiades, said she had had “enough, five years of austerity, it’s enough. We’d like to have our dignity back, our pride and our freedom. And we’re not afraid.”

Nick, a civil servant, and his partner Christina, doing a masters degree in informatics, also said their vote was intended to strengthen the leftist prime minister’s hand at whatever negotiations with Greece’s creditors follow the referendum. “They have to understand we won’t get out of this unless we get some debt relief,” said Nick. “And that we have the right to decide for ourselves, implement a different economic policy. They can’t just dictate the way we run our country.”

Christina said her No vote would be “against the way Europe – some people, at the top of Europe – has handled this whole story. We hope our actions will set an example for the whole of Europe.

There is some union support in Germany for the Greek anti-austerity camp:

Tsipras is making his way through the crowd at the ‘No’ rally.

The Greek prime minister Alexis Tsipras has just emerged from his office - smiling in white shirt and slacks - and is about to walk to Syntagma (a ten-minute stroll) to address the crowd, Helena Smith reports.

Police are estimating both crowds at around 20,000 each, reports John Hooper from Athens.

The comments come from an interview with Politico. You can read the interview in full here. The European Council president sought to lower the temperature on the Greek crisis, calling on Athens and its creditors to stop the mutual “blame game,” work to “rebuild trust” and quickly return to the negotiating table after Sunday’s referendum.

The main aim for us is to keep the eurozone united.

Tusk said the EU will work with Athens regardless of Sunday’s outcome, though

if the Greeks vote Yes, I think it’s a chance to open a new chapter in negotiations, perhaps more promising than before.”

More from Donald Tusk, courtesy of Reuters. Striking a conciliatory note, the European Council president said if Greeks vote ‘No’ to the bailout package there will be less room for negotiations but the aim remains to keep the eurozone united.

He added:

Maybe we will have to get used to living with a country as a member of the eurozone in bankruptcy.

Jon Henley has spoken to protesters at the ‘No’ rally in Athens.

“I’m here to shout No at the top of my voice,” said Panos Stathopoulos, a recently retired dentist. “No to austerity, no to this European Union that seems to have no sentiment, nothing.”

Sporting a red-and-white OXI sticker, Stathopoulos said after five years of austerity: “They know the situation very well, and still they keep trying to impose these measures on the weakest of us – I’m sorry for the founding fathers of the EU, I don’t think they ever envisaged a Europe like this.”

Friends and colleagues Eri, Constantina and Marta – all psychologists – said they had come because “we want to have hope.” They would vote No on Sunday because “we want to be able to express our own opinions, and to decide for ourselves, in our own country,” said Eri.“We want to have hope hope for ourselves, for our children and for our country. At the moment, we decide nothing. We suffer what others decide for us. They have to realise that can’t be right.”

News flash on Reuters: Donald Tusk, president of the European Council, says the Greek referendum is NOT a vote on whether the country should stay in the euro.

Meanwhile, crowds supporting the ‘No’ campaign are also swelling in Syntagama square, reports Helena Smith.

SKAI TV is showing demonstrators packed into the square and spilling out into surrounding streets. The cries of “Oxi” [No in Greek] have wafted from loud speakers all the way into Plaka, Athens’ old town, from where I write these lines.

Anticipation is mounting ahead of prime minister Alexis Tsipras addressing the crowd at 9pm. Many are holding placards denouncing the “barbaric austerity” imposed on Greece at the behest of international creditors at the EU, ECB and IMF for the past five years. Some of the country’s most popular singers, musicians, composers and actors are in attendance and will host a concert after the rally in what the leftist-led government has defiantly called a ‘festival of the people.’

Tonight’s ‘yes’ and ‘no’ rallies depict in very dramatic form the dangerous divide now taking hold of Greece – between those who favour reform and see themselves as pro-European, pro-western and pro-modernisation and those who say the country can no longer bear any more of the self-defeating austerity that has brought so many to their knees.

Big crowds are waiting for Tsipras to speak, around 9pm local time (7pm London time). Live music first from various bands. You can watch the ‘No’ rally live here.

Here’s more on the ‘Yes’ rally, from Helena Smith in Athens. Aerial views of the two huge rallies currently taking place in Athens are being projected from helicopters hired by local TV stations.

Panoramic images relayed by Skai TV are showing a HUGE crowd of Yes voters gathered around Athens’ marble Kalimarmaro stadium. Many are holding Greek flags and placards proclaiming “yes to Greece, yes to the euro.” Some are also screaming “resign” “resign” at the leftist-led government.

The “yes” [NAI in Greek] campaign, which has won wide support from leading politicians in recent days (and is backed by nearly all of Greece’s big, business-owned media channels) argues that the country should be kept in the euro at any cost.

Ironically, many Greeks who are no fans of the political opposition [backing the Yes campaign] and cast ballots in favour of prime minister Alexis Tsipras’ Syriza party in January, are now supporting the Yes campaign for fear that Athens’ relationship with Europe might otherwise be irreparably damaged.

“I will be voting yes with a heavy heart but there is no other way,” said Anna Papandreou in what has become a commonly expressed sentiment in recent days.

More rallies abroad... in Berlin

And, finally, a pic from the ‘Yes’ rally in Athens...

Interesting age breakdown.

Other rallies in Cologne and Frankfurt in Germany and Glasgow express sympathy with anti-austerity protesters in Greece.

Meanwhile, US senators have written to IMF chief Christine Lagarde warning of the consequences for the fund if there is no satisfactory solution for Greece.

Back to the protests...

Potential costs of Greek default, calculated by RBS using official figures:

This placard tells Germany’s finance minister to “go to hell”.

Looks like the protesters involved in scuffles with police are anarchists. Other reports suggest rally is peaceful.

The ‘No’ rally in Syntagma Square in Athens has got under way.

Over in Athens, bankers contacted by the Guardian are expressing grave doubts that lenders will be fully functioning next week. Our correspondent Helena Smith reports

There is almost no ATM in central Athens, as I write, that does not have a huddle of people, cards to the ready, in front of it. This is the beginning of what was meant to be another record year of tourist arrivals and many of those now lining up around cash dispensers are holidaymakers (or journalists as the very heart of the Greek capital has also been taken over by a media circus).

And therein lies the problem: by Monday ATMs will have run out of the very cash Greece so badly needs precisely because demands far outstrips supply and stocks are running out fast. “I have very grave doubts as to whether banks will open on Tuesday and even if they do there will be no cash transactions,” one banker confided. “I have seen directors at the Bank of Greece in a state of panic because our liquidity buffer is being eaten up and without the [bailout] programme there’s no ELA [emergency liquidity assistance]. We are in a real mess.”

With capital controls in place, many fear it could be months before they are fully lifted, with potentially devastating repercussions for the economy.

“The situation is very serious,” the president of the national confederation of Hellenic Commerce Vasillis Korkidis told me earlier. “Now that they are in place capital controls may last for a year. The cap on cash withdrawals will probably be raised (from €60 per day) but other restrictions vould remain in place. We saw what happened to Cyprus where it took two years before controls were lifted.”

As we reported earlier today the Greek finance minister himself said “paper money” had become a problem.

If banks run out of cash before Sunday’s referendum it could have a devastating effect on the “no” vote, analysts say.

“The site of ATMs running out of cash before Sunday would destroy the no vote,” said the prominent political commentatos Aristides Hatzis. “The “yes” would win with a landslide which is why the government is insisting and I think praying that everything will be OK at least until Monday.”

Greece’s top administrative court has rejected an appeal by two Greek citizens against Sunday’s referendum on the country’s bailout package, as just reported. A bit more detail, courtesy of Reuters:

“Rejected,” said the presiding judge in Greece’s Council of State court Nikolaos Sakellariou. “The referendum will be held.”

Pollsters say the vote is too close to call.

The news has boosted the euro, which has risen to $1.107 within minutes, from $1.1094.

European stock markets have closed, ending the day slightly lower.

FTSE 100 index in London down 44.69 points, or 0.67%, at 6585.78

Dax in Frankfurt down 40.96 points, or 0.37%, at 11,058.39

CAC in Paris down 27.34 points, or 0.57%, at 4808.22

Ibex in Madrid down 66.60 points, or 0.6%, at 10,779.80

FTSE MiB in Milan down 108.37 points, or 0.48%, at 22,508.13

The Athens stock market has been closed all week.

Another opinion poll, from the Proto Thema website, shows the ‘Yes’ camp at 41.7% while the ‘No’ camp is at 41.1% and 10.7% are undecided. The poll was conducted by Alco on behalf of the Proto Thema newspaper.

We are still waiting for a decision from Greece’s top court on whether Sunday’s referendum is legal... and there are two big rallies scheduled for tonight, both in Syntagma Square in Athens. Prime minister Alexis Tsipras is set to speak at the ‘No’ rally.

100 researchers from the European University Institute have come out in support of the ‘No’ camp in Greece. The institute is an international postgraduate and post-doctoral teaching and research institute set up by European Union member states. The researchers say say a ‘no’ vote is a step towards a new Europe.

We, researchers of the European University Institute, feel the urge and the duty to express our full-hearted solidarity with the Greek people, who, for five years now, have been suffering the dramatic consequences of the austerity policies imposed by the Troika, and how are now struggling for the right to decide upon their own future.

We defend the right of the Greek people to freely express its will, and we support a ‘NO’ vote in Sunday’s referendum in Greece...

The choice, in Sunday’s referendum, is neither about the euro nor about the Greek government. It is a choice between austerity and democracy in the whole of the European Union. A choice between fear and hope.

Let’s look at what economists have to say about Greece and the odds of an exit from the eurozone.

Oxford Economics says:

Whatever the referendum outcome, the ECB is unlikely to significantly increase ELA [emergency liquidity assistance to Greek banks] limits any time soon. Cyprus was able to gradually loosen capital controls because of a decisive and credible commitment to reform. This is not possible in Greece. Our latest scenario analysis suggests an exit probability of around 67%.

Economists at Société Générale say:

A ‘Yes’ vote: a semi-stable outcome at best.

A ‘Yes’ vote would allow negotiations to resume on the basis of the late June proposals. However, early elections or an unstable coalition would also follow a ‘Yes’ vote. And given the time and complexity entailed by a new programme, the third Greek bailout (worth between €60-80bn in our opinion) is unlikely to be approved before late August. As a result, Greece is set to default on its ECB debt repayments (both in July and August). Despite this however, the ECB will continue to provide liquidity to Greek banks as long as the line of communication remains open and at least until there is clarification on the political side. That being said, the ECB is likely to issue a statement requiring a programme to recapitalise Greek banks. The introduction of a parallel currency may be on the cards even with a ‘Yes’. Finally, even with a third bailout, the implementation risks remain high - creating a semi-stable outcome.

A ‘No’ vote would significantly increase the odds of Grexit, though some hopes remain that it could be avoided.

A ‘No’ vote would not immediately trigger a Grexit, especially as the chance of new elections still remain, even in this scenario (as the Greek president would most likely resign). Moreover, some form of negotiation may resume. As long as the line of communication remains open and until the Eurogroup and EU leaders make it clear that Grexit is unavoidable, the ECB will maintain ELA funding - though potentially with increased collateral haircuts. Once the political backing is given by the EU leaders, the ECB would start unwinding the ELA funding, trying to implement a managed exit in coordination with the Central Bank of Greece. The EU is much better equipped to stem contagion today than in 2011-12, with a QE programme in place, the ESM facilities (the Secondary Market Purchase Programme in particular) and the OMT. Moreover, the direct financial costs are manageable - though Cyprus, already under a programme, is the weakest link. The political contagion is the most significant (though not immediate) risk. Limiting this risk will require further steps towards a genuine monetary, fiscal and political union.

The bank has also looked at the impact on financial markets.

Clearly, markets are more in wait-and-see mode than in outright panic. Nevertheless, we expect the referendum to set the tone for next week, but whatever the result, we believe the markets are willing to move on to other issues, and we expect credit markets to normalise following the summer period.

Both sides are equally to blame in letting the Greek debt crisis get to a point now fraught with immense political and economic risks for the entire eurozone, says Vicky Pryce, chief economic adviser at the Centre for Economic and Business Research. She is also the author of Greekonomics: The Euro Crisis and Why Politicians Don’t Get It.

Asked by the Guardian how she would vote on Sunday, Pryce said: “The referendum should never have been held. But I would vote yes.”

She continued:

In truth the creditors’ offer to the Greeks differs little in terms of overall austerity to that asked for by the Greeks except on where some of the pain may fall and that hasn’t been explained to the Greeks. There has been too much austerity but a no vote would make things worse. It would almost certainly mean banks becoming insolvent, an exit from the euro and a much faster decline in economic activity with hyperinflation following as the drachma that is introduced instantly devalues.”

A yes vote would keep banks open and give mandate for a deal to be struck that recognises the new Greek realities and includes, as the IMF now says, restructuring of the debt which every economist knows is unsustainable. This would offer some light at the end of the tunnel. A no vote would make that almost impossible to accomplish and could plunge Greece into years of economic turmoil.”

Here in the UK, Caroline Lucas, Green party MP for Brighton, has written in the Independent:

The Troika’s intransigence on austerity amounts to nothing short of an attempted coup. A democratically elected Government is being backed in a corner by the servants of capital who are desperate to embarrass the Greek electorate for daring to question austerity. For those of us who believe in the EU as a body which should uphold human rights and value solidarity, this bullying is particularly repulsive.

A reader in the Netherlands has sent us this. Jeroen Dijsselbloem, the Dutch finance minister and president of the Eurogroup, spoke after the Dutch cabinet meeting today with regard to Greek finance minister Yanis Varoufakis’ comments on a deal being in the offing.

According to Dutch newspaper de Volkskrant, Dijsselbloem described this as “completely incorrect” and said: “He [Varoufakis] made that up completely. No new proposals have been sent to Athens,” adding: “We are not near a solution.”

Many thanks for the translation to our reader in The Hague, Rik Remeijn.

At least half a million Greeks are unable to vote in the referendum – unless they return to the country before Sunday’s poll. Under Greek law, people must travel home to where they are registered for voting.

Since the 2007-08 financial crisis, 405,666 Greeks have left the country, according to Eurostat, the European Union’s statistical office.

The head of Greece’s bank association has just said that Greek banks have enough liquidity to see them through Monday morning, according to Reuters. After that, everything depends on the ECB.

Meanwhile, tabloid Bild has polled readers in its own Greece referendum. “Should we support Greece with further taxpayer billions?” was the loaded question it asked readers.

Referring to the Greek referendum on Sunday, Bild said:

We Germans should be asked whether we want to go on paying!

Europe has been paying for bankrupt Greece for the last five years. Athens has received about €325bn in total. Germany’s share is about €88bn.

Bild has asked Germans in Berlin how they would vote. Some would continue to support Greece to show solidarity, because ‘the country cannot help itself’. The majority, however, in the poll voted ‘no!’.

Staying with the German press for now… the liberal weekly Die Zeit has made an emotional appeal to Greece: “Stay with us!”

In an editorial available in German, Greek and English, Marc Brost writes:

Dear Greece, you’re deciding about your country’s future. But it goes far beyond that.

None of us has to make such a decision and we can be happy about that, because if Greeks are now voting, it is not only their own future that will be decided. You, dear Greeks, also will be making a decision about the fate of 500 million people in Europe. You will decide how things will be for all of us.

It is only fitting for this insidious and confusing crisis that everything now comes down to a seemingly simple yes or no by the Greek people, even though so many very painful decisions are involved. It is not yet clear whether there will even be a referendum at all. But, one way or another you, dear Greeks, must turn against the policies you voted for just five months ago. You must take the side of the creditor nations, even though you voted down their crisis policies in the parliamentary elections. You must come to terms with your creditors, even though many of you have the impression you have been betrayed in the past couple of years. That is a lot to ask. And yet, that is where our hope lies.

No one can tell you how you should vote; not a minister from abroad and certainly not a foreign newspaper. But a lot of people in Europe now have grown very concerned.

Greek prime minister Alexis Tsipras has addressed the nation on Greek television. He said the latest IMF report confirms his government’s argument that its debt position is not sustainable. The report said the cash-strapped country needs up to €60bn (£42bn) of extra funds over the next three years and large-scale debt relief to give Greece some breathing space and get its economy back on track.

Tsipras also called on Greeks to “calmly go to the polls” on Sunday.

Greek business leading are voicing growing concerns over capital controls, adds Helena Smith who reports that speculation is mounting that they could be enforced for much longer than a few weeks. She writes:

In four short days capital controls have had a catastrophic effect. This week alone business leaders estimate that the measures have wrought €1.2bn worth of damage on an economy that has essentially come to a grinding halt.

“Imports, exports, factories, firms, transport, everything is frozen,” said Vasillis Korkidis, who heads the national Confederation of Hellenic Commerce. “The only sectors in demand are food and fuel.”

“Even in the best case scenario it is going to take months to recover from the shock of closed banks and capital controls,” Korkidis told me. “We already estimate that the damage is around €1.2bn already which will almost certainly have to be added to any agreement [to balance budgets].”

Shortages have begun to appear with popular Cycladic island destinations further away from stock, being especially hit. Reports of shortages in medications and basics are said to be on the rise in Athens.

Korkidis said committees had been established in all four of the country’s systemic banks to examine applications from companies that need to pay suppliers for food and medication. “But they won’t be doing that until after the referendum next week which means more shortages.”

Currently all bank transaction have been stopped because of controls.

Meanwhile, tourism, the engine of the Greek economy, has also taken a huge hit with an estimated 50,000 holidaymakers cancelling bookings every day. The Greek Tourism Confederation (SETE) announced that bookings were down by 40% in the last few days following the government’s decision to hold a referendum at what will shortly be the height of the tourist season.

Yanis Varoufakis’ hopes of a quick deal do not seem to fit in with what the Germans think, it would seem.

German finance minister Wolfgang Schäuble has been speaking to Bild:

Three out of four members of business group the Institute of Directors think it is likely Greece will be forced to leave the eurozone within the next twelve months.

In a new survey IoD members said the most probable outcome of Grexit would be “a messy default which negatively affects financial markets and creates pressure on other euro members.” This outcome was considered likely by nearly two-thirds of the business leaders surveyed, while 45% also thought there was a risk of widespread bank runs in other southern European countries.

Longer-term, 45% of members said there is a good chance that Grexit would be followed by other countries leaving the euro.

Nearly half thought a Greek exit from the eurozone would have a negative impact on the UK.

Keeping Greece in the eurozone while easing its debt burden is correct and achieveable, according to Jeffrey D. Sachs, UN special advisor and author of The End of Poverty.

In a new blogpost he sets out four stages to achieve this:

First, I recommend that the Greek people give a resounding “No” to the creditors in the referendum on their demands this weekend.

Second, Greece should continue to withhold service on its external debts to official creditors in advance of a consensual debt restructuring later this year. Given its great depression, Greece should use its savings to pay pensioners, provide food relief, make crucial infrastructure repairs, and direct liquidity toward the banking system.

Third, Prime Minister Alexis Tsipras must use his persuasive powers to convince the public, in the style of US President Franklin D. Roosevelt, that the only thing they have to fear is fear itself. Specifically, the government should make clear to all Greeks that their euro deposits are safe; that the country will remain within the eurozone (despite the false claims by some members of the Eurogroup that a no vote means a Greek exit); and that its banks will reopen immediately after the referendum.

Finally, Greece and Germany need to come to a rapprochement soon after the referendum and agree to a package of economic reforms and debt relief. No country – including Greece – should expect to be offered debt relief on a silver platter; relief must be earned and justified by real reforms that restore growth, to the benefit of both debtor and creditor. And yet, a corpse cannot carry out reforms. That is why debt relief and reforms must be offered together, not reforms “first” with some vague promises that debt relief will come in some unspecified amount at some unspecified time in the future (as some in Europe have said to Greece).

Easing Greece’s debt burden while keeping the country within the eurozone is the correct and achievable path out of the crisis, and it can be accomplished easily through a mutual accord between Germany and Greece, to which the rest of Europe will subscribe. The result would be a win not only for those countries, but also for the world economy.

And the piece seems to have some immediate support:

Campaign group Global Justice is at the British Museum to show solidarity with Greece:

The Global Justice release says:

Members of the campaign groups Global Justice Now and Jubilee Debt Campaign have this morning unfurled a banner at the ‘Elgin Marbles’ in the British Museum with the slogan “OXI No - No More Looting - Support Greece”

Many see the statues as a symbol of how northern Europe ‘looted’ Greek wealth in the past, and protestors claim that the enormous international pressure being placed on Greece to institute austerity, privatisation and deregulation represents a similar looting today.

And now it seems Greek prime minister Alexis Tsipras is about to make another TV statement.

European Central Bank member Ewald Nowotny has said the emergency liquidity assistance for Greek banks will last until Monday:

Here’s more on the comments from Greece’s deputy finance minister Euclid Tsakalotos, courtesy of the Kathimerini newspaper:

The Syriza-led government decided that a referendum was the only way forward as the proposal submitted by Greece’s international creditors before talks collapsed on Friday “would never have been ratified by Parliament and would have brought down the government,” Alternate Minister of International Economic Relations and chief negotiator Euclid Tsakalotos told Skai television on Friday morning.

Tsakalotos said that the Greek economy needs a “shock of optimism” with the removal, once and for all, of fears that Greece could be ousted from the eurozone.

Syriza’s Tsakalotos says referendum was called to stave off government collapse

And a point that a no vote is a no against austerity, not against Europe:

Some contributions received from our Guardian Witness call-out.

Things seem calm in Corfu:

And an invitation to tonight’s Yes rally:

Meanwhile a decision is due on whether the referendum can actually go ahead. Helena Smith reports:

Greece’s highest court, the Council of State has begun meeting in urgent session to consider the legality of Sunday’s referendum..

At the request of the tribunal’s vice president, Nicholas Sakellariou, the Council of State has begun meeting to consider whether the referendum should be cancelled on constitutional grounds. The court, the highest legal body in the land, was convened after two individuals contested the plebiscite.

Even if the court rules against the referendum’s legality there is some suggestion that with parliament having endorsed the plebiscite, it will still take place.

Here’s a piece from Jon Henley on the costly referendum Greece can scarcely afford:

Its banks closed and being drained steadily of cash, its economic and political crises worsening by the day, Greece is scrambling to organise a referendum on Sunday that it can ill afford.

The leftist Syriza-led government of Alexis Tsipras says the cost of distributing ballot papers and paying monitors will be around €20m (£14m), but the conservative opposition – citing finance ministry data – puts the final cost at closer to €120m.

The vote will also be expensive for Greece’s 10.5 million voters, many already hard pressed and all restricted since Monday to daily cash withdrawals of just €60. There is no postal or absentee voting: all who want to cast a ballot must return to the polling stations where they are registered, generally their home town.

The latest polls show the result on a knife edge. A survey published on Friday morning by the ALCO institute put the yes camp on 44.8%, against 43.4% for no, with 74% of respondents saying they wanted Greece to remain in the euro.

The referendum, the country’s first since 1974, will use the same monitors and the same 19,000 polling stations as in the January general election that propelled Syriza and Tsipras to power.

In a bid to encourage a high turnout, the government has said all public transport in the greater Athens area will be free. For voters returning from abroad, Aegean Airways is also organising four extra return “referendum flights” from London and Brussels on Sunday and Monday.

Full story here:

A temporary Grexit might be one way to help resolve the current crisis, allowing Greece to devalue the currency and become more competitive. That was the suggestion of Hans Werner Sinn of German economic research institute Ifo on BBC world service this morning.

Talk about playing something down.

Germany’s economy minister Sigmar Gabriel has said the Greek crisis is “a relatively small problem in Europe.”

To be fair, he was speaking in the context of the Ukraine conflict....

(Quote via Reuters)

Over in Athens the spectre of bank cash reserves running dry is the cause of mounting concern in official and financial circles. Our correspondent Helena Smith reports:

Is Greece heading towards a banking crisis? That is the question on the lips of government officials and senior financiers barely four days after banks were closed and capital controls imposed.

In another interview this morning with an Athenian radio station, the Greek finance minister appeared to acknowledge those concerns saying:

“Until Monday there will not be a problem at ATM’s.”

(NB: Earlier on RTE radio in Ireland he said banks would re-open on Tuesday)

Asked if the leftist-led government would be able to pay salaries and pensions at the end of the month he retorted: “This week is problematic but it is an investment in a viable agreement. The state will be able to pay [wages and pensions] because on Monday we will have an agreement, one way or another. What is important is that revenues haven’t collapse. The problem is paper money.”

That chimes with what business leaders have been saying for some days now: that by Monday lenders will have run out of cash supplies to ensure that ATMs are replenished.

Claims that a deal will be reached with creditors by Monday “one way or another” have been met with disbelief with the Syriza-led administration looking ever more chaotic in its handling of the situation.

Prime minister Alexis Tsipras’ pledge last night that he would personally fly off to Brussels so that an accord is signed “within 48 hours” of the referendum – “whether the result is a ‘yes’ which would be for a solution that is unviable or a no that will strengthen our hand” – has added to the sense of growing confusion.

Eurozone retail sales for May have come in slightly better than expected, up 0.2% month on month compared to estimates of a 0.1% rise. The year on year rise was 2.4% compared to a 2.3% forecast.

Here’s our report on the latest developments:

Greece’s highest administrative court will rule on whether the country’s bailout referendum violates the constitution, amid growing concern that the hastily organised vote falls short of democratic standards.

With less than 48 hours until polling day on Sunday, the yes and no sides will stage large rallies in Athens on Friday evening. The Greek prime minister, Alexis Tsipras, is expected to turn out at the no rally, having attacked his eurozone partners for trying to “blackmail” his country into accepting a bad deal.

Greeks are being asked whether to support an EU bailout deal that would grant the debt-stricken country money in exchange for spending cuts and further reform.

However, the bailout plan no longer exists, having lapsed on 30 June. Eurozone leaders have lined up to say that voting no means saying goodbye to Greece’s eurozone membership, but Greece’s radical left Syriza-led government insists a no vote would simply boost its negotiating hand.

Later on Friday, the Council of State will determine whether the vote violates Greece’s constitution, which bans referendums on fiscal policy.

Full story here:

Following the earlier report that Greece’s deputy finance minister Euclid Tsakalotos said the government chose a referendum because an agreement would not be passed by parliament, the man himself has tweeted to clarify:

Which seems to translate to:

Enough with the distortion. What I said on SKAI is that the proposal of institutions will not be passed by the House, not ours.

And here’s the UK services PMI, which showed the sector growing by more than expected:

Here’s a roundup of the day’s PMI data so far, and it’s all relatively positive.

The eurozone composite PMI:

Eurozone services PMI:

Ireland’s service sector:

Italy:

France:

Spain:

Germany:

And from earlier, China:

Here’s an idea of the timings for Sunday’s referendum:

That’s if the Council of State doesn’t rule against it of course. A decision is expected by this evening.

Greece’s deputy finance minister Euclid Tsakalotos has reportedly said that the government chose a referendum because an agreement would not be passed by parliament:

Story here (in Greek).

More on tonight’s rallies:

Speaking of polls (but not the Greek referendum this time):

Meanwhile UBS has looked at the chances of Greece leaving the eurozone, depending on the result of the referendum:

Varoufakis said that even if the yes side won, it would be “a narrow victory” and Syriza would still be the only party capable of running the country.

He admitted the Greek government had made mistakes: “It would be arrogant to day we hadn’t - we’re not professionals at this.”

Markets have opened cautiously, with the FTSE 100 down just 4 points, Germany off 0.3% and Italy, Spain and France flat.

On the economic front, there are service sector PMI figures due from Italy, France, Germany and the eurozone as a whole, as well as the UK.

The US, of course, is closed for the Independence Day holiday.

Greece’s finance minister clearly relishes the IMF saying the country needs an agreement on debt relief: