Greek prime minister puts bailout deal to referendum July 5

ATHENS, Greece – Greece’s prime minister on Friday called a surprise referendum for July 5 on the financially troubled country’s fraught bailout talks with international creditors, and government officials are calling on the nation to reject the proposed deal.

Alexis Tsipras announced the referendum in a televised address to the Greek people early today, following an emergency meeting of his Cabinet.

“The Greek government has been asked to accept a proposal that places new unbearable burdens on the Greek people,” Tsipras said. “Right now, we bear an historic responsibility concerning … the future of our country. And this responsibility obliges us to answer (bailout creditors’) ultimatum based on the sovereign will of the Greek people.”

The move radically raises the stakes in Greece’s confrontation with bailout creditors, whom Tsipras accused of demanding new pension cuts, sales tax hikes and labor market reforms.

Tsipras said he would ask creditors today for an extension “of a few days” to Greece’s bailout program, which expires on Tuesday. In theory, without an extension, the country will lose access to any remaining bailout funds.

“The question will be acceptance or rejection of (the bailout creditors’) proposal” for a new deal, Tsipras said. His radical left-led government had already said it rejected the latest proposals from representatives of the European Commission, European Central Bank and International Monetary Fund.

Later today, finance ministers from the 19-member eurozone were due to meet in Brussels for what had been billed as a last attempt to reach a mutually agreed deal. If there is no agreement, Greece will very soon run out of cash, default on its debt mountain and possibly crash out of the eurozone and adopt a weak national currency of its own – a move widely seen as a financial disaster.

Development Minister Panayiotis Lafazanis urged Greeks after the late-night Cabinet meeting to vote against the creditors’ proposal.

“The answer of the Greek people will be a resounding no,” he told reporters.

State Minister Nikos Pappas echoed the sentiment. “Our people will vote no, you will see,” he said. “This is a very good night … the Greek people will soon be able to decide” for themselves.