Following a week of marathon talks and intense negotiations between Greece and its partners to break the deadlock over an agreement for the release of bailout funds, the Greek Government decided at an emergency Cabinet meeting late Friday night (26.6) to call for a referendum on July 5, so that Greek people can decide on whether the creditors’ proposals should be accepted or not.

Addressing the Greek people in a televised statement following the meeting, Prime Minister Alexis Tsipras said that after five months of tough negotiations, Greece’s creditors submitted a “proposal-ultimatum at the Eurogroup meeting, taking aim at Greek democracy and the Greek people,” that contravened the founding principles and values of Europe.

If accepted, these proposals would add to the already unbearable burden shouldered by the Greek people, further undermining economic and social recovery as well as exacerbating social inequalities; they "directly violate the European social acquis and the fundamental rights to work, equality and dignity," and are far-removed from any prospect of a beneficial agreement for all parties. 

In the early hours of Sunday (27.6) morning, the Greek parliament approved the motion for the referendum with 178 votes in favour, 120 against, and two abstentions.

Following the Eurogroup's decision (on Saturday, 26.6) not to extend Greece's programme and the subsequent European Liquidity Assistance (ELA) cap imposed by the European Central Bank (ECB), the Bank of Greece was forced to recommend capital controls and a bank holiday today. Limits have also been set on daily withdrawals until the day after the referendum (6 July).

Assuring the Greek people that bank deposits, wages and pensions, are all secure, in a televised address last night, Prime Minister Alexis Tsipras said that the rejection of Greece’s "request for a few days' extension of the programme to give the people a chance to decide by referendum on the institutions’ ultimatum constitutes an unprecedented challenge to European affairs, an action that seeks to bar the right of a sovereign people to exercise their democratic prerogative."

The premier noted he was sending a request for a short extension once again, this time to the President of the European Council and to the 18 Heads of State of the Eurozone, as well as to the heads of the ECB, the European Commission and the European Parliament.