Greece debt crisis: Tsipras announces bailout referendum

Greece will hold a referendum on 5 July on a controversial bailout deal with foreign creditors, Prime Minister Alexis Tsipras has announced.

In a televised address, he described the plan as "humiliation" and condemned "unbearable" austerity measures demanded by creditors.

The Greek government earlier rejected the proposals, aimed at avoiding the country defaulting on its debt. Greece has to make a €1.5bn ($1.7bn; £1.06bn) IMF debt repayment on 30 June.

In the speech, Mr Tsipras said: "These proposals, which clearly violate the European rules and the basic rights to work, equality and dignity show that the purpose of some of the partners and institutions was not a viable agreement for all parties, but possibly the humiliation of an entire people."

"The people must decide free of any blackmail," he added. Greek debt talks - main sticking points:

    Greece has refused to accept cuts to pension payments or public sector wages

    The IMF is pushing for deeper spending cuts, not just more tax rises

    A key point of friction is a special benefit paid to some low-income pensioners, which creditors want scrapped

    Creditors also want a wider VAT base; Greece says it will not allow extra VAT on medicines or electricity bills, and has also resisted calls for VAT hikes on hotels and restaurants

    Athens wants a concrete commitment to debt relief, something its creditors are not offering

How did Greece get in this mess?

Mr Tsipras was speaking just hours after talks in Brussels, where the creditors offered a five-month extension to Greece's bailout programme.

The proposal would have released €15.5bn of funding, €1.8bn of which would have been available now. However, that was conditional on Greece carrying out reforms. The offer is due to be discussed at a meeting of eurozone finance ministers on Saturday.

German Chancellor Angela Merkel had urged Athens to accept what she called an "extraordinarily generous" offer. The protracted negotiations are stalled over what reforms Athens is prepared to take, with disputes emerging on pensions and increasing Value Added Tax.

If Greece does default, it could exit the eurozone, with possible repercussions for the rest of Europe and the world economy.

Only once agreement is reached will the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF) unlock the final €7.2bn tranche of bailout funds for cash-strapped Greece.

Greece has been in recession for six years. After winning elections in January, Mr Tsipras' left-wing Syriza party promised to end tough austerity measures.

Syriza says tough bailout conditions have impoverished Greece, fuelling unemployment - currently at more than 20% - and failing to reduce the massive debt pile.

Πηγή: bbc.com