Greece’s parliament voted early Sunday in favor of Prime Minister Alexis Tsipras’ motion to hold a July 5 referendum on creditor proposals for reforms in exchange for loans, with the country’s future in the eurozone looking increasingly shaky.
Tsipras’ surprise call stunned Greece’s international debt negotiators, and the country took a big step closer to falling out of the euro currency union after fellow eurozone member states refused to extend its bailout program past its expiry date on Tuesday, leaving Greece on the brink of financial chaos.
On Saturday, European finance chiefs shelved efforts to rescue Greece, turning their focus to containing fallout from a looming financial collapse as Greek savers lined up at local banks and ATMs to pull out as many euros as they could.
Meeting in Brussels on Saturday evening after rejecting Greece’s request to extend its aid program beyond June 30, the ministers urged the cash-strapped nation to protect its lenders. The European Central Bank, which has kept the nation afloat, is set to discuss Sunday whether to pull the plug on its emergency lending, leaving the country with no backstop.
“Monday could be a bank holiday” in Greece, Ireland’s Michael Noonan said. “It’s not a question of waiting to see what might happen on Monday in terms of crisis. The crisis has commenced.”
Around Greece, lines formed outside ATMs in an accelerating bank run that may require capital controls to husband the lenders’ dwindling resources.
Tsipras previously has urged voters to reject the terms of the bailout.
Public opinion is at odds with Tsipras’ hard-line, according to a survey published Saturday. Two-thirds say Greece should remain in the euro area, and 57.5 percent say the government should back down to reach a deal with creditors, the Kapa Research poll for To Vima newspaper showed.
Eurogroup head Jeroen Dijsselbloem told reporters in Brussels that Yanis Varoufakis had requested a one-month extension.
With “no comprehensive package agreed” to by ministers, Dijsselbloem said the Greek government faces the expiry of its aid program on Tuesday night without any future financing in place.
“Greece will experience acute difficulties,” German Finance Minister Wolfgang Schaeuble said at a media briefing that ended with him shrugging his shoulders. Even if that happens, the other 18 euro countries are in a better position to contain the damage than when the crisis initially spread from Greece in 2011 and 2012, several ministers said.
The Associated Press contributed to this report.
