BRUSSELS, Belgium – Angry eurozone ministers said Greece's shock decision Saturday, June 27, to hold a referendum on its bailout had closed the door on the chances of a deal to save Athens from default and a possible euro exit.
The most dramatic day in the 5-month crisis saw long lines of people queueing at cash machines in Greece after the announcement by leftist Prime Minister Alexis Tsipras amid fears of a bank run and possible capital controls.
Greece will vote on July 5 on the outcome of negotiations with its international creditors that have dragged on since January, when Tsipras's Syriza party first took power on a promise of ending austerity.
As the Eurogroup of eurozone finance ministers held a crunch meeting in Brussels, their Dutch leader Jeroen Dijsselbloem said he was "very negatively surprised" by the Greek referendum decision.
"That is a sad decision for Greece because it has closed the door for further talks where the door was still open in my mind," Dijsselbloem said.
"We will hear from the Greek minister about whether all this is correct and then we will talk about the consequences that will have," he added.
Germany's hardline pro-austerity finance minister Wolfgang Schaeuble said the Greek government had "ended the negotiations unilaterally."
Confusion now surrounds the state of Greek finances, with the vote coming 5 days after a June 30 deadline for Greece to pay the IMF 1.5 billion euros that Athens says it cannot afford without a deal.
On Friday, Greece's international creditors had offered Athens a 5-month, 12-billion-euro ($13.4-billion) extension of its rescue program but said it must seal a reform deal this weekend to avoid the IMF default.
The current bailout program itself is also due to expire on June 30, meaning that the eurozone ministers must on Saturday decide whether to give Greece a few extra days to vote on it – as well as whether to keep the 5-month offer on the table at all.
The European Central Bank will now play a crucial role in ensuring Greece's banks have the cash to open on Monday, and two top Tsipras aides were meeting ECB head Mario Draghi in Brussels on Saturday.
Greece was stunned by the referendum announcement by radical leader Tsipras, which came just hours after he had been at a summit with European leaders in a bid to end the crisis.
"The people must decide free of any blackmail," the 40-year-old prime minister said in a televised address to the nation late on Friday.
"We were asked to implement austerity measures... allowing the deregulation of the labor market, pension cuts, and an increase in VAT on food products, targeting the humiliation of an entire people," Tsipras said in his address.
In Greece's second city, Thessaloniki, some banks have run out of money, according to an Agence France-Presse reporter, while a National bank branch had a queue of 50 people.
"I have a shop. I came to the bank to withdraw as much money as I can in order to cover the needs of my shop for next week," 42-year-old Maria Kalpakidou told AFP.
Demand at petrol stations was also said to have "heightened" but there were no fuel shortage problems, according to state news agency ANA.
'Plan B is now Plan A'
The Eurogroup will now also be discussing worst case scenarios, ranging from a Greek default next week to a possible exit from the eurozone, which would shake the European post-war project to its foundations.
"I think plan B is fast unravelling into plan A," said Finnish Finance Minister Alex Stubb. "We cannot extend the program as it stands."
However IMF chief Christine Lagarde took a softer line than most of Europe's politicians, saying that the Washington-based lender "will continue to work" on Greece's financial survival.
Irish Finance Minister Michael Noonan, whose own country recently left an EU-IMF rescue package, said he was "open to persuasions in both directions" on the possibility of a bailout extension.
The Greek government's immediate priority on Monday will to be to keep the country's banks open.
Draghi has been keeping the Greek banking system alive with near-daily cash infusions as it is frozen out of the capital markets.
Greece has had two international bailouts worth 240 billion euros since the crisis started in 2010, with 5 years of recession and high unemployment adding to the pain of austerity measures demanded by the EU and IMF. – Danny Kemp, Alex Pigman, AFP/Rappler.com