Greek parliament approves referendum on creditor reforms

AP News
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Posted: Jun 27, 2015 7:57 PM
Greek parliament approves referendum on creditor reforms

ATHENS, Greece (AP) — The latest news about the Greek bailout talks (all times local):

2:53 a.m.

Greece's parliament has voted in favor of Prime Minister Alexis Tsipras' motion to hold a referendum on the country's creditor proposals for reforms in exchange for loans. Tsipras and his coalition government have urged people to vote against the deal, throwing into question the country's financial future.

The vote is to be held next Sunday, June 5. It has raised the question of whether Greece can remain in Europe's joint currency, the euro. Many Greeks alarmed by the announcement for the referendum early Saturday morning formed queues at ATM machines, putting a further strain on banking deposits.

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01:49 a.m.

Greek Prime Minister Alexis Tsipras has once more urged Greeks to vote against creditor proposals for reforms in exchange for loans in a referendum he has called for next week.

Parliament is now to vote on his motion for a referendum to be held. It is expected to pass, as his coalition government holds a majority of 162 seats in the 300-member parliament.

Speaking in parliament, Tsipras said the reforms proposed by Greece's creditor institutions — the International Monetary Fund, European Central Bank and European Commission, were an ultimatum and an insult.

"We exhausted every limit of concessions so there could be an agreement," Tsipras said. "Perhaps some saw that as a weakness."

He said the Greek people would vote against a deal on June 5.

"This no will also be a big yes, a big yes to the decision of the Greek government to reject an ultimatum that insults the Greek people."

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0:46 a.m.

Greece's main opposition New Democracy party has returned to parliament and the session has resumed to discuss the prime minister's call for a referendum on reform proposals suggested by the country's international creditors.

The Greek parliament is to vote on whether to accept Prime Minister Alexis Tsipras' call for a referendum on June 5. The proposal is expected to pass as the coalition government of Tsipras' radical left Syriza party and a small nationalist party holds 162 seats.

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0:10 a.m.

Greece's main opposition New Democracy party has walked out of parliament during a tumultuous debate on the prime minister's call for a referendum on creditors' reform proposals, over a dispute with the parliament speaker.

The country's 300 lawmakers are to vote on whether to accept Prime Minister Alexis Tsipras' call for a referendum on June 5. The proposal needs 151 votes and it is expected to pass as the coalition government of Tsipras' radical left Syriza party and a small nationalist party holds 162 seats.

New Democracy head Antonis Samaras walked out during the heated debate after a bitter dispute with parliament speaker Zoi Konstantopoulou, whom he accused of violating parliamentary procedures. Konstantopoulou is a Syriza lawmaker, and has frequently been criticized for not remaining impartial in debates as her role requires.

Tsipras called for the ND lawmakers to return so the debate could be concluded and the vote held. It was unclear, however, whether they would return.

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9:45 p.m.

Ireland's Finance Minister Michael Noonan says he is confident that the euro currency will stand strong despite the setback with Greece.

He says the eurozone nations' "assessment was that we are in a much better situation than we were following the collapse of Lehman Brothers, when Europe was ill-prepared."

He adds that "there's no level of anxiety" among the euro partners.

But Noonan was concerned about developments in Greece, where people are queuing at banks and fuel stations.

"It's not I think a question of waiting to see what might happen on Monday in terms of crisis — the crisis has commenced," he told reporters as he left a eurozone meeting.

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9:40 p.m.

In the end, Luxembourg Finance Minister Pierre Gramegna said Greece gave the other eurozone ministers no choice but to vote against extending the bailout program for Greece, a move which sent Athens toward an uncertain financial future.

Gramegna said that "the Greek decision to so suddenly announce a referendum without warning its partners has not only surprised everyone but also shocked confidence." He spoke after two eurozone finance ministers' meetings, one with Greece and one without it.

He said displeasure increased when late Friday, "the Greek delegation left the table in the middle of negotiations when the prime minister decided on a referendum."

"Thirdly, and perhaps the most dramatic element, was the Greek announcement to advise its people to vote against the European package that was not even finalized."

Greece's bailout program ends Tuesday. It had sought an extension to be able to have a referendum on July 5 on whether to accept the creditors' bailout proposals, and recommended Greeks to vote against them.

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9:15 p.m.

The eurozone's top official says the door remains open for more talks with Greece, even though the country's government insisted that the international creditors had issued an ultimatum that forced it away from the negotiating table.

Jeroen Dijsselbloem, the president of the eurogroup meetings of finance ministers, said "it was not the institutions that walked away from the last talks last night. It was not us that said the talks have come to an end in a negative way, it was the Greek government."

He spoke after 18 of the 19 finance ministers from the eurozone met, excluding Greece.

Dijsselbloem said there are options left in the coming days, before Greece's bailout program expires after June 30 Greece holds a referendum on the bailout proposal on July 5.

"The process has not ended. It will never end, probably, and we will continue to work with Greece," Dijsselbloem said.

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7:50 p.m.

Finance Minister Michel Sapin says France is ready to immediately become a go-between between Greece and its international creditors to avoid a further collapse of the bailout negotiations and find a belated agreement.

The finance ministers of the eurozone on Saturday refused to grant Greece a one-month extension to its bailout program, bringing Greece closer to being unable to make debt payments due as soon as Tuesday. Greece rejected a proposal from international creditors on reforms needed to keep bailout funds coming.

"France is available today, tomorrow, the day after, as from the start, to be a go-between to find an agreement that is solid," Sapin said. "I say it with conviction: France is today ready to make sure that at any time the dialogue can resume."

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6:10 p.m.

Greece's finance minister says there is still a chance his country could reach a bailout deal with creditors, despite the latest breakdown in talks.

Eurozone finance ministers on Saturday rejected Greece's request for an extension to its bailout program so that it could put the creditors' bailout proposals to a popular vote July 5. Greece's bailout program expires on Tuesday and it is unclear whether it can support its banks after that date without a deal with creditors.

Yanis Varoufakis says the eurozone finance ministers would continue their meeting without Greece on Saturday night to evaluate the consequences of the recent decisions.

He told reporters, however, that there is still the "possibility of negotiating through the day and through the night and through the day ahead of us in the coming days to improve the agreement."

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5:40 p.m.

The eurozone's top official, Jeroen Dijsselbloem, says the bailout program for Greece will expire on Tuesday. The country had requested an extension so that it can hold a referendum July 5 on the reform program demanded by creditors.

Without a bailout program, it is uncertain whether Greece will be able to continue to receive emergency support for its banks.

Dijsselbloem said Saturday at the end of a eurozone finance ministers' meeting that "however regretful, the program will expire on Tuesday night. That is the latest stage we could have reached an agreement, and it will expire on Tuesday night."

After Greek Finance Minister Yanis Varoufakis left, the 18 remaining ministers are to continue talks in an informal session to see what action to take to assure the continued stability of their shared currency.

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5:25 p.m.

The finance ministers of the eurozone have rejected a Greek request to extend the deadline of its bailout program until after a planned July 5 referendum.

Two eurozone officials, who spoke only on condition of anonymity because the decision was not yet officially announced, said the finance ministers would continue meeting in an informal session without Greek Finance Minister Yanis Varoufakis.

One official said there could not be an extension of the program now because there was no basis for cooperation. Many among the 19 eurozone ministers said that they were surprised and disappointed by the announcement of Prime Minister Alexis Tsipras to seek a referendum.

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2:50 p.m.

German Finance Minister Wolfgang Schaeuble says 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 program.

Schaeuble said as he arrived at a meeting with other eurozone finance ministers that "the negotiations apparently have been declared at an end" by Prime Minister Alexis Tsipras. Schaeuble 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," 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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2:35 p.m.

Finland's finance minister, Alexander Stubb, warns that Greece's referendum announcement has forced eurozone nations to assess other options if the bailout talks fail.

The referendum decision would require Greece's creditors, which include eurozone states, to extend the country's bailout program by a few days.

He says that "there is pretty much a consensus inside the eurogroup that we cannot extend the program as it stands," he said. "Consequently I would argue that Plan B becomes Plan A," he said, without elaborating.

(This item has been corrected to show that Stubb did not specify that the eurozone should discuss Greece's exit from the euro.)

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2:20 p.m.

The EU's economics and monetary affairs chief, Pierre Moscovici, says the differences between Greece and its creditors can be bridged, and he emphasizes the importance of Greece remaining in the 19-nation euro bloc.

He said before a eurozone finance ministers' meeting Saturday that "proposals are on the table. These proposals are favorable to Greece, favorable to the Greek people."

The Greek government has called for a referendum to be held in a week on the creditors' proposals for reforms in exchange for loans. It has urged the people to vote against the deal, leaving open what would happen to the country in such a case.

Moscovici added: "I see that there are differences, but the differences are quite limited, and they are identified."

"The place of Greece is in the eurozone and we are working on that."

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2:15 p.m.

The head of the International Monetary Fund says that Greece's rescue creditors "will continue to work" for a deal to save the country — even though Athens called for a referendum and advised Greeks to reject the proposals of international creditors.

Christine Lagarde says that the creditors "always showed flexibility to adjust to the new political and economic situation in Greece," thus rejecting claims from Greek Prime Minister Alexis Tsipras that his country was facing an ultimatum.

But Lagarde insists 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."

Once that's done, "it requires financial support" from the international partners.

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2:10 p.m.

The eurozone's top official, Jeroen Dijsselbloem, says that Greece has closed the door on further talks to end the standoff with its creditors because it called for a referendum on the proposals of the creditors, with an advice to reject it.

He said before entering a eurozone finance ministers' meeting Saturday: "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."

Greece has a debt repayment on Tuesday it cannot afford and its bailout program expires the same day. To be able to hold a referendum on July 5, as it has called for the Greek government would need an extension to the bailout program from its creditors. It would also need continued support for its banks from the European Central Bank.

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1:25 p.m.

The Netherlands cautions against granting any more time to Greece, which faces a debt deadline on Tuesday, when it has a 1.6 billion euro ($1.8 billion) repayment to make and its bailout program 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."

Greek Prime Minister Alexis Tsipras has called for a referendum on the creditor's bailout proposal on July 5, well after the country's debt deadline. He even advised Greeks to not accept the proposal, leaving it unclear what the country's prospects would be in such a case.

Wiebes stressed that those involved in the talks must "consider a deadline as a deadline."

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1:15 p.m.

The head of a major German economic think-tank says the only way Greece could stay in the eurozone if Greeks reject reform conditions in a popular vote next week would be for creditors to agree to debt relief and Greek banks to be rescued without outside help — largely by customers forfeiting part of their deposits.

Clemens Fuest of the Center for European Economic Research says that "that is not practically workable."

As Greeks withdraw money from cash machines, the banks are under increasing financial strain. So far, the European Central Bank is supporting the Greek banks by allowing them to draw on emergency credit.

Fuest says that, unless Greece puts limits on money withdrawals and transfers, the ECB will face the choice on Monday of accepting the collapse of Greek banks or further expanding the emergency credit.

Fuest says that "only with capital controls from Monday can Greece be given time until July 5 to hold a referendum on the rescue program."

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11:50 a.m.

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

Sigmar Gabriel told Deutschlandfunk radio: "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 program that has been negotiated, it could make sense."

The agenda of the Greek Parliament showed the referendum would be on a proposal of reforms that creditors offered to Greece on Thursday. Should Greeks reject the proposal, it is unclear what Greece's options would then be.

Gabriel added: "There must be a clear program. And what he (Tsipras) would like — for Europe to send 20 or 30 billion in aid programs 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.

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11:30 a.m.

The Greek Parliament will open a debate at noon local time on whether or not to approve the government's planned referendum on the creditors' latest proposal for a bailout.

The Parliament has posted Saturday's agenda on its website, saying it will vote on the referendum at about 7 p.m.

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

The proposal, according to Parliament's agenda, is made up of two documents: one called "Reforms for the completion of the Current Program and Beyond" and another called "Preliminary debt sustainability analysis."

Aside for the issue of making these documents accessible to all voters, the Parliament must also deal with a likely contingency of creditors withdrawing those proposals at the Eurogroup meeting later Saturday.