Greek Prime Minister puts bailout deal to referendum

27 Jun 2015 | Author: | No comments yet »

Greece’s Tsipras calls July 5 referendum on bailout demands.

Greece’s fraught bailout talks with its creditors took a dramatic turn early today, with the radical left government announcing a referendum in just over a week on the latest proposed deal and urging voters to reject it. “Right now, we bear an historic responsibility concerning … the future of our country.Few walked the rain-slick streets of Athens after midnight Saturday when Prime Minister Alexis Tsipras announced his shock decision to let Greeks determine their own financial fate — and perhaps Europe’s, as well. And this responsibility obliges us to answer (the bailout creditors’) ultimatum based on the sovereign will of the Greek people.” The move radically raises the stakes in Greece’s confrontation with its increasingly irate creditors, whom Tsipras accused of demanding new pension cuts, sales tax hikes and labor market reforms.

Tsipras said. “I call on the Greek people to rule on the blackmailing ultimatum, asking us to accept a strict and humiliating austerity without end and without prospect.” Since coming to power, Mr. On July 5, Greece would choose whether to accept the latest demands from their creditors – more pension cuts and tax hikes – or face a possible exit from the euro and the economic unknown.

Some headed straight for the ATM to withdraw precious euros, even as Deputy Foreign Minister Euclid Tsakalotos assured them that the banks would open on Monday. The referendum announcement also raises severe questions over whether the debt-crippled country will be able to remain solvent and in the 19-state eurozone. Others cheered the chance for Greece to regain control of its finances after more than five years of economic decline and fiscal cliffhangers directed by foreign bankers and politicians. “They’re trying to kill us, they’re trying to kill us, they’re trying to kill us,” said Ianos Kalivas, eating at a kebab shop near Parliament Square. “It’s like we live in a constant state of fear.” How Greeks will vote is unclear. More than 56 percent favored retaining the euro, compared with 35.4 percent who preferred default and an exit over a bad debt deal, according to a Mega TV poll released June 16.

That was before Greek leaders denounced euro area negotiators as blackmailers out to humiliate their country and urged people to vote “no” in the referendum. A Greek official close to the bailout negotiations said the country was unlikely to pay the IMF on Tuesday, adding that IMF rules allow a certain period during which a country is considered to be in arrears. While a negative result could prompt the European Central Bank to cut its financial lifeline to the country’s banks and raise the risk of a Greek default, a “yes” vote could force Tsipras into early elections. The government could soon run out of cash, face huge difficulties in paying pensions and civil servant salaries, and that could force it to leave the eurozone and adopt a weak national currency. Nikolas Karagianakis, a pensioner who paused while kick-starting a scooter early Saturday morning to watch a live video feed on his phone, said he hoped his countrymen would consider the consequences of the referendum. “It’s a horrible idea,” Karagianakis said. “Staying in the euro is going to be tough, but going back to the drachma will be worse.

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