Greece to hold referendum on debt deal

People walk outside the Bank of Greece in Athens July 20, 2010. The chief of Greece's Public Debt Management Agency (PDMA) said on Tuesday he was satisfied with the sale of 1.95 billion euros ($2.53 billion) of 13-week T-bills at a yield of 4.05 percent, the country's second debt sale since a giant EU/IMF emergency loan backstop agreed in May. REUTERS/John kolesidis (GREECE - Tags: POLITICS BUSINESS)

Greek Prime Minister Alexia Tsipras on Saturday said the country will hold a referendum on July 5 on the latest debt deal proposed by its international creditors.

On June 30, the second extension of the >Greek bailout expires and Athens must later this month make a payment of 1.6 billion euros ($1.8 billion) or risk crashing out of the single currency and possibly the EU. The talks have been in deadlock for five months.

Tsipras’ announcement was made after he attended an emergency cabinet meeting on Friday evening upon his arrival in Athens after he attended talks over the country’s debt crisis held in the Belgian capital of Brussels, where the creditors offered a five-month extension proposal to

>Greece’s bailout programme ,

BBC reported.

The proposal would have released 15.5 billion euros (about $17 billion) of funding, 1.8 billion euros (about $2 billion) 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.

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

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

According to analysts, a “no” vote in the July 5 referendum would most likely lead >Greece to default on its debts and an exit from the eurozone.