The Greek Parliament approved Prime Minister Alexis Tsiparis’ motion to hold a referendum on Greek creditors’ fiscal reform proposal early Sunday, the Associated Press reported. The vote, scheduled for July 5, will ask Greek citizens whether they should accept a debt financing deal negotiated with European lenders.
"The creditors have not sought our approval but have asked for us to abandon our dignity. We must refuse," Prime Minister Alexis Tsipras said in urging voters to reject the deal.
Greece owes the International Monetary Fund some 1.6 billion euros, due Tuesday. Its bailout program expires on the same day. Unless it receives an infusion of new funds, Greece may face a collapse of its economy and be required to leave the euro.
Eurozone finance ministers met in Brussels Saturday to reject Greece’s request to extend the IMF bailout deadline for a month to give voters a chance to have their say. Tsipras said late Saturday the referendum would take place whether Greece’s partners wanted it to or not. Parliament agreed with him; the measure needed 151 votes to pass, winning at least 179 of the body's 300 votes.
With the rejection of the bailout extension and the referendum set for five days after the June 30 deadline, Greece was expected to default on its payment, perhaps leading to the collapse of its economy.
Greece’s European partners were unhappy with the announcement of the referendum and are skeptical Tsipras will be able to make tough decisions to bring his country’s financial system back to more stable ground.
Jeroen Dijsselbloem, the top official for the eurozone, said Saturday he was disappointed in Greece’s decision to call for the referendum on the creditor proposals. “After our last meeting, the door on our side was still open, but that door has closed on the Greek side,” he said.
Upon hearing the announcement of the referendum Saturday morning, Greeks around the country lined up at ATMs to withdraw cash -- further jeopardizing the country’s fragile banking system.