Greek parliament to debate proposal to hold referendum on bailout

Alexis Tsipras, Greece PM

The Greek parliament is to debate whether or not to approve the government’s planned referendum on the creditors’ latest proposal for a bailout.

The parliament has posted today’s agenda on its website, saying members will vote on the referendum at about 7pm local time.

It says the July 5 referendum announced by Prime Minister Alexis Tsipras will be on whether voters approve or reject the bailout proposal submitted by Greece’s creditors on Thursday.

The proposal, according to parliament’s agenda, is made up of two documents – one called Reforms For The Completion Of The Current Programme And Beyond and another called Preliminary Debt Sustainability Analysis.

Aside from the issue of making these documents accessible to all voters, the parliament must also deal with the possibility of creditors withdrawing those proposals at a Eurogroup meeting later today.

Germany’s vice chancellor said that a Greek referendum on the bailout talks could in principle make sense, but that it should be clear to voters what they will be deciding on.

Sigmar Gabriel said: “We would be well-advised not simply to push this proposal from Mr. Tsipras aside and say that it’s a trick. If the questions are clear – if it’s really clear that they are voting on a programme that has been negotiated, it could make sense.”

Mr Gabriel added: “There must be a clear programme. And what he (Tsipras) would like – for Europe to send 20 or 30 billion in aid programmes to Greece, but without any conditions – Europe cannot accept.”

He said that “Europe is offering a great deal” and that “many of the tough measures that were being debated at the beginning are off the table”.

He pointed to EU efforts to invest in growth, softening the previous focus on austerity.

Across Athens, people started flocking to cash machines shortly after Mr Tsipras announced the referendum, just after 1am local time. The length of queues at cash machines, and the availability of cash, varies widely. The Bank of Greece promised that the flow of cash to ATMs will not be interrupted.

The Greek government said it would recommend Greeks vote “no” in the referendum. What would happen in that case – whether Greece would have to leave the euro or try to renegotiate more time with creditors – is unclear.

Former prime minister Costas Karamanlis broke a long-standing silence and severely criticised the government’s “foolish choice”.

“The nation’s most vital interests demand that the country remains at the heart of Europe. The EU’s actual shortcomings do not, in any way, negate this …” Mr Karamanlis said.

“Foolish choices that undermine this principle push the country to adventures, with unpredictable and possibly irreversible consequences,” he added.

Panagiotis Lafazanis, a senior Syriza minister overseeing the energy sector, environment and agriculture, came out strongly against approving the creditors’ proposal.

“A ‘No’ will provide a big respite for Greece and the Greek people,” he told reporters as he arrived at the Parliament. “It will be a big yes to a new era of reconstruction and progress.”

Asked if this would take place inside or outside the euro, he said: “It is you (the media) who pose this dilemma. The dilemma for the people is whether they will live better.”

Health Minister Panayiotis Kouroumblis, on the other hand, said that Greece does not want a rupture with Europe. “The referendum is part of the negotiation,” he said.

In the streets of Athens, views were mixed on the merits of holding a referendum.

[pull_quote_right]”The people are not in a position to decide. Those who are in position to decide are the ones that know a bit more and they must explain and simplify the issues for the people,” said Grigoris Kanellopoulos, 41, a street seller of bagels.[/pull_quote_right]

Athina Kontosozou, 56, has already made up her made about how she will vote.

“No (to the creditors’ proposals), no to any more measures. We don’t know what will happen (after the referendum). Let’s hope that things will be better. And they will get better. We believe it”.

The Netherlands cautioned against granting any more time to Greece, which faces a debt deadline on Tuesday, when it has a €1.6bn repayment to make and its bailout programme expires.

Dutch state secretary Eric Wiebes said before the start of a eurozone finance ministers’ meeting: “I see no reason for delay. The positions are very clear. We have known the deadline for four months.”

The eurozone’s top official, Jeroen Dijsselbloem, warned that Greece has closed the door on further talks to end the stand-off with its creditors because it called for a referendum on the proposals with an advice to reject them.

He said before entering a eurozone finance ministers’ meeting: “I am very disappointed. After our last meeting, the door on our side was still open, but that door has closed on the Greek side.”

However, the head of the International Monetary Fund said that Greece’s creditors “will continue to work” for a deal to save the country.

Christine Lagarde said that the creditors “always showed flexibility to adjust to the new political and economic situation in Greece,” thus rejecting claims from Mr Tsipras that his country was facing an ultimatum.

But Ms Lagarde insisted Greece needs to do more. “It requires a balanced approach, on the one hand there has to be structural reforms, deep ones, to change the Greek economy, to make it more productive, more efficient so that it generates growth and jobs,” she said.

Once that is done, “it requires financial support” from the international partners, she added.

Finland’s finance minister Alexander Stubb warned that the referendum announcement has brought Greece closer to an exit from the euro, the so-called Plan B if the debt talks fail.

He said that “there is pretty much a consensus inside the eurogroup that we cannot extend the programme as it stands,” he said. “Consequently I would argue that Plan B becomes Plan A.”

He said the eurozone finance ministers should now discuss a Greek exit from the single currency.

He added: “I think that’s the only option we have to discuss because there’s nothing else on the table.”

German finance minister Wolfgang Schaeuble said that by calling for a referendum on the creditors’ proposals to keep Greece solvent – and by advising Greeks to reject them – the country appears to have ended the negotiations on its bailout programme.

Mr Schaeuble said that “the negotiations apparently have been declared at an end” by Mr Tsipras. He said that “if I understood correctly … we now have no basis for further negotiations”.

He was looking forward to hear what his Greek counterpart Yanis Varoufakis would have to say about the latest developments.

“We’ll see what he says. With Greece, apparently you must never rule out surprises,” Mr Schaeuble said.

“But to be honest, none of the colleagues I spoke to beforehand sees any possibility for what we can do now.”

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