Greece Parliament Backs Bailout Referendum

The Greek lawmakers have backed plans for a referendum on international creditors’ terms for a new bailout.

The July 5 referendum was called by Prime Minister Alexis Tsipras, who opposes further budget cuts. He urged voters to deliver a “resounding <<No>>” to the package.

Eurozone partners have criticized Greece’s referendum announcement, and rejected its request to extend the bailout program beyond June 30.

Greece could default on a €1.6 billion repayment to the International Monetary Fund (IMF) due on that day.

There are fears the country may leave the euro and that its economy may collapse without new bailout funds.

Alexis Tsipras’ motion on a referendum easily won backing in the 300-member strong parliament, with at least 179 lawmakers voting in favor of it in the early hours of Sunday, June 28.

Speaking just before the vote, Alexis Tsipras described the creditors’ proposal as “an insulting ultimatum” and said an emphatic “No” vote on July 5 would strengthen Greece’s negotiating position.

His government had earlier rejected the creditors’ offer of a five-month extension to Greece’s bailout program in exchange for reforms.

On June 28, eurozone finance ministers rejected the Greek proposal for the bailout extension beyond Tuesday’s deadline. A Eurogroup statement said Greece had broken off negotiations over a new bailout deal “unilaterally”.

Eurogroup head Jeroen Dijsselbloem said it would now be up to the European Central Bank (ECB) to decide whether to continue providing emergency liquidity funding to the Greek banking system.

Meanwhile, queues have formed in Greece outside banks in the past few days amid concerns that the central bank might start restricting withdrawals.