Updated | Greece to hold referendum over bailout terms

Greek Prime Minister Alexis Tsipras has called a referendum on a bailout deal with the country’s international creditors.

Following an emergency cabinet meeting, Tsipras said that the package of austerity measures proposed by creditors in a last-ditch attempt to avert a Greek default will be put to popular vote on Sunday 5 July.

“After five months of hard negotiations our partners, unfortunately, ended up making a proposal that was an ultimatum towards Greek democracy and the Greek people,” Tsipras said in a national address, “It was an ultimatum at odds with the founding principles and values of Europe, the values of our common European construction.

“But I personally pledge that I will respect the result of your democratic choice, whatever that may be.”

Scicluna critical of referendum timing

In comments to Bloomberg just before the start of Saturday’s emergency meeting, Malta’s finance minister Edward Scicluna said “We will go into today’s Eurogroup meeting with a very long list of questions for Yanis Varoufakis. And we need clear answers from him.”

He said that the most pertinent question at this stage is “What sort of question will the Greeks be faced with? Will they be faced with the situation we faced this week at the Eurogroup when we were given two documents to choose from? Is there going to be an agreed package today which then is put for the people to decide on?”

Scicluna also had harsh words for the timing of the referendum, asking why the Greek government opted for a vote a week after Tuesday’s deadline.

“One should have resorted to a referendum before the deadline because between that deadline and the six days to the referendum are the most difficult. One cannot but expect instability,” Scicluna said.

Tsipras had earlier rejected the proposed reforms after days of high-level talks in Burssels. The proposal would have released €15.5 billion of funding, €1.8bn of which would have been available now. However, that was conditional on Greece carrying out social reforms.

Tsipras described the proposed reforms as “blackmail for the acceptance on our part of severe and humiliating austerity without end and without the prospect of ever prospering socially and economically”.

He said that Greeks now faced a “historic responsibility” to respond to the ultimatum and that he had informed the leaders of France, Germany and the European Central Bank about his decision.

“I asked them to extend our current bailout by a few days so this democratic process could take place,” he said.

In the referendum, Greeks would be asked whether they wanted to accept or reject further tax hikes and pension cuts that the EU, ECB and International Monetary Fund have set as a condition to release desperately needed bailout funds.

Greece’s current rescue programme is due to expire on 30 June, the same day it has to make a €1.5 billion debt repayment to the IMF.