Greek voters will decide in a referendum whether their government should accept an economic reform package put forth by Greece's creditors, Prime Minister Alexis Tsipras announced.
Tsipras said he had already informed President Prokopis Pavlopoulos and the largest opposition party, the conservative New Democracy party, of the plans.
"The people must decide free of any blackmail... the referendum will take place on July 5," Tsipras announced early Saturday on Greek television, after a week of acrimonious talks in Brussels.
The Greek Parliament is due to debate and vote at midnight Saturday on the government's request for a referendum as finance ministers from the 19 euro countries, Greece's main creditors, were gathering to discuss the situation in Brussels.
Meanwhile, International Monetary Fund chief Christine Lagarde said on Saturday the lender would keep working on Greece's economy despite the government's decision to hold a referendum on an international bailout offer.
"The purpose of what we're doing is to actually restore stability of the economy in Greece, this is what we'll continue to do. We'll continue to work," Lagarde told reporters before joining a meeting of eurozone finance ministers.
Meanwhile, eurozone finance ministers refused on Saturday to extend Greece's bailout programme past June 30 after Athens called a referendum on reform proposals by creditors, sources told AFP.
The ministers "rejected an extension of the aid programme" at a meeting in Brussels, hours after Greek Prime Minister Alexis Tsipras called the plebiscite on the bailout proposal for July 5.
Greek government's decision to hold a referendum on international bailout offer was not welcomed at all by the eurozone's key figures. "If I understood correctly ... we now have no basis for further negotiations." German Finance Minister Wolfgang Schaeuble said, commenting on Greek government's referendum proposal and their advice to Greek people to vote no for creditors' proposals. Finland's finance minister Alexander Stubb said that the eurozone finance ministers meeting Saturday should now discuss a Greek exit from the single currency. "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." were eurozone's top official Jeroen Djisselbloem's words.
Greece's current bailout program expires on Tuesday, after which it is unclear whether its banks would be able to avoid collapse. The cash-stripped country have already delayed four debt repayments to IMF due in June, accumulated to $1.55 billion to be paid in June 30. Greece also has further payments of $630 million to IMF and 6.64 billion euros to the European Central Bank (ECB) due in July and August.
After Tsipras' announcement, Greece's Development Minister Panayiotis Lafazanis urged the nation to vote against the country's bailout deal in referendum. Lafazanis said Greeks will answer "with a resounding no" in the vote. Nikos Voutsis, the country's Interior Minister, said in his address to the Parliament convened on Saturday that a unanimous approval for the referendum would make the country's position in negotiations stronger.
However, former Prime Minister Costas Karamanlis broke a longstanding silence and severely criticized the government's "foolish choice." "The nation's most vital interests demand that the country remains at the heart of Europe. The EU's actual shortcomings do not, in any way, negate this..." Karamanlis said. "Foolish choices that undermine this principle push the country to adventures, with unpredictable and possibly irreversible consequences," he added.
Following the Prime Minister's announcement on holding a referendum, across Athens, people started flocking to cash machines shortly after Prime Minister Alexis Tsipras announced the referendum, just after 1 a.m. local time. The length of queues at cash machines, and the availability of cash, varies widely. The Bank of Greece assured, in a statement Saturday afternoon, that the flow of cash to ATMs will not be interrupted. About 50 people, most visibly anxious, were waiting early in the morning outside a Piraeus Bank branch in central Athens, one of very few that opens on Saturdays, before they found out it wouldn't be opening after all. An elderly woman in the queue fainted, making the headlines in Greece and in the world.