Greece’s euro creditors balk at aid extension
BRUSSELS — Greece’s place in the euro currency bloc looked increasingly shaky Saturday after eurozone nations rejected a monthlong extension to its bailout program and the prime minister called for a risky popular vote on the country’s financial future.
Worried Greeks queued outside banks for cash amid the uncertainty, while eurozone finance ministers decided to hold a meeting without Greece to assess how to keep the euro currency union stable Greece drops out.
Prime Minister Alexis Tsipras shocked Greece’s creditors late Friday when he called for a referendum on whether to accept the reforms that the rescue lenders want in return for more financial aid. The country’s bailout program ends Tuesday and, without an extension or more loans from creditors, Greece is likely to be in arrears on a debt payment due the same day.
The Greek government’s call for the people to vote against a proposed bailout deal from international creditors July 5 angered many of its eurozone partners.
“The Greek authorities have asked for a month extension. But in that month there can be no disbursements,” said Jeroen Dijsselbloem, the top eurozone official. “How does the Greek government think that it will survive and deal with its problems in that period? I do not know.”
Much will now depend on whether the European Central Bank will continue to prop up Greek banks even after the country’s bailout program expires. It would be under huge pressure to stop using eurozone taxpayer money to keep alive the banks if there is no prospect for a deal.
In that case, the banks would likely collapse and the Greek government would have to support them itself.