Germany says surprise Greek referendum plan shuts door on negotiations

Germany all but buried negotiations on Saturday (27 June) to keep Greece from default, saying a surprise decision by Greek Prime Minister Alexis Tsipras to call a referendum had left nothing to discuss but how to cope with failure. Worried the country could default and even leave the eurozone, some Greeks queued up at cash machines to withdraw funds, though there were no signs of panic in Athens. Many sounded defiant, saying Tsipras had offered them an important chance to determine their own fate. Eurozone finance ministers met in Brussels for what had been intended as a final negotiation for a deal to rescue Greece from defaulting on a big debt payment on Tuesday (30 June), when an international bailout expires.

"We have no basis for further negotiations," German Finance Minister Wolfgang Schaeuble said. "Clearly we can never rule out surprises with Greece, so there can always be hope. But none of my colleagues with whom I've already spoken see any possibilities for what we can now do."

Finland's Alexander Stubb called it "potentially a very sad day, specifically for the Greek people. I think with the announcement of this referendum we're basically closing the door for any further negotiations."

"There is pretty much a consensus inside the Eurogroup that we cannot extend the program as it stands and consequently I would argue that Plan B becomes Plan A."

Greek Finance Minister Yannis Varoufakis said he would press for an extension of the bailout to give time to hold the referendum.

"We are going to suggest to them that under these circumstances we should have an extension for a few weeks to ensure that the people are heard," he told Reuters.

But several of his euro zone counterparts appeared to rule out any such grace period. Germany's Schaeuble said: "Greece has left the negotiating table and so we are in a situation where on Tuesday the program ends, because there are no more negotiations."

With most Greek banks closed for the weekend, there was no sign of panic on the streets of Athens. Government officials said there was no plan to impose capital controls that would limit withdrawals.

But police tightened security around bank teller machines as lines formed at some in the darkness almost as soon as Tsipras's early hours televised speech was finished.

The Bank of Greece said it was making "huge efforts" to ensure the machines remained stocked.

(Reuters)

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