Tsipras announces referendum will be held on Greek bailout

Greek Prime Minister Alexis Tsipras announced last night that a referendum on the Greek bailout will take place on Sunday week, July 5th.

Mr Tsipras was speaking after he returned to Athens from talks in Brussels aimed at ending the Greek impasse. In a live televised address Mr Tsipras said that a referendum would take place on the terms being offered by creditors to Greece.

“These proposals, which clearly violate the European rules and the basic rights to work, equality and dignity show that the purpose of some of the partners and institutions was not a viable agreement for all parties, but possibly the humiliation of an entire people,” he said.

“Greeks, with this blackmail to accept an austere and humiliating austerity programme which has no end and no prospect of getting back on our feet, I call upon you to decide patriotically and proudly as dictated by the proud history of Greeks.”

Athens will ask for an extension of its bailout agreement, which ends on June 30th, by a few days in light of the referendum, he added.

Greek State Minister Nikos Pappas, a senior aide to Mr Tsipras, said he believed the Greeks would vote to reject the bailout agreement offered by creditors. In the meantime, Euro zone finance ministers will gather today in Brussels for their fifth emergency meeting in just over a week, in a bid to resolve the escalating Greek crisis ahead of Tuesday’s IMF repayment deadline.

Greece’s bailout expires on June 30th, the same day as a €1.6 billion repayment to the IMF falls due, prompting fears that Greece may default if a bailout agreement is not reached.

Despite meeting German chancellor Angela Merkel and French president François Hollande on the fringes of yesterday's EU summit, Greek prime minister Alexis Tsipras made little headway on the Greek bailout discussions, with leaders insisting negotiations continue to take place at a technical level.

Leaving the summit, the Greek prime minister accused the EU of blackmail. "The European Union founding principles were democracy, solidarity, equality and mutual respect. It was not based on blackmail and ultimatums. No one has the right to put in danger these principles," he said.

Amid reports that Greece could be offered a five-month extension on its bailout, which would unlock over €5 billion of cash, there was continuing resistance in Athens to committing to a new bailout deal. The Greek government released a paper yesterday outlining why it could not commit to the current proposals.

But officials in Brussels said that the room for manoeuvre on the creditors’ side was also limited. “Either Greece is set to accept more or less this proposal or finance ministers will start to discuss the Plan B on Saturday evening,” said a senior EU official. “It’s 50:50.”

Generous

Speaking at the end of a two-day summit of leaders Dr Merkel described the institutions’ latest proposal as “generous”. “We have been accommodating. We have taken steps in the direction of Greece,” she said, citing the concessions made on the primary surplus target for Greece. “We believe it is now for Greece to make a similar step in our direction.”

European Commission president Jean-Claude Juncker said Saturday was "a crucial day not only for Greece but also for the euro area as a whole.

“I am quite optimistic but not over optimistic . . . We have made progress . . . There is a real chance of concluding an agreement,” he said.

Mr Tsipras returned to Athens yesterday afternoon after a series of meetings over the last three days in Brussels failed to yield a common proposal on a new reform package for Greece. Amid continuing resistance from members of his own party towards the latest proposal , the Greek leader was expected to hold an emergency cabinet meeting last night ahead of a possible vote on a new proposal in the Greek parliament on Sunday.

Speaking in Brussels yesterday, Taoiseach Enda Kenny said Greece would get an extension of its current bailout for another six months if agreement can be reached at today’s euro group. Speaking to journalists at the end of the EU leaders’ summit in Brussels, he said that time was running very short but a solution could still be found if there was proper engagement.

Mr Kenny said that if there was agreement and it was signed off on by the euro zone finance ministers, it meant there could be an extension of the current programme for six months.

“It shows the willingness of the institutions and everybody else to accommodate the proposals that have come in from Greece,” he said.

Ending instability

Mr Kenny said he had told the meeting of EU leaders on Thursday night of the Irish experience during the bailout and how “our focus was on ending instability and creating growth and providing opportunities for jobs” as a way out of the crisis.

“It was not a case of me telling him [Tsipras] what happened in our case and saying you have to do the same, but saying what we did and how we were able to exit the bailout.”

The Taoiseach said he had pointed to the damage the current instability was causing and how that was affecting the ordinary people of Greece.

“So I do hope that measures can emerge to deal with that and I spoke to the prime minister about that,” he added.