Greek parliament backs bailout referendum

Greek lawmakers have backed Prime Minister Alexis Tsipras’ call for a referendum on the country’s deal with international creditors, increasing Greece’s chance of exiting the euro zone.

The referendum planned for Sunday July 5 easily passed the 151-vote threshold, with at least 179 members of parliament out of a total 300 voting in favour. Deputies from the far right Golden Dawn voted in favour of the referendum whereas pro-European opposition parties New Democracy, Pasok and To Potami and the KKE Communist Party voting against.

Greeks are due to vote on whether to accept or reject the latest terms offered by creditors to Athens in order to unlock billions of euros in bailout fund, after the government had earlier rejected the creditors' offer a five-month extension to Greece's bailout programme in exchange for reforms. 

European partners have reacted negatively to the announcement of the referendum. On Saturday, they rejected a request by Tsipras to extend the current bailout in order to cover the period leading up to the referendum.

The rejection means Athens is likely to default on a key €1.6 billion repayment to the International Monetary Fund due on June 30. If this were to occur, it would spell disaster for the Greek banking system as it is currently relying on emergency cash injections from European Central Bank - one of its foreign creditors.

In a speech prior to the vote, Tsipras - who earlier described the creditors' proposal as an "insulting ultimatum" - said he was confident that “the Greek people will say an emphatic no to the ultimatum” by the country's creditors - the International Monetary Fund, European Central Bank and European Commission.

“The day of truth is coming for the creditors, the time when they will see that Greece will not surrender, that Greece is not a game that has ended,” he said in an address to parliament laced with references to democracy and national dignity.

“I am certain that the Greek people will rise to the historical circumstances and issue a resounding 'No' to the ultimatum,” he said as he wound up the debate before a vote to authorise the referendum.

The move comes after five months of stalemated negotiations, with Tsipras accusing creditors of trying to strong-arm his country into taking harsh austerity measures he says would hammer an economy already on its knees after five months of creditor-demanded spending cuts and tax hikes.

"The creditors have not sought our approval but have asked for us to abandon our dignity. We must refuse," Tsipras said.