Greece Debt Crisis: Finance Ministers Refuse Bailout Extension

by Elizabeth Chuck and Alastair Jamieson /  / Updated 

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Greece cannot have an extension to its bailout program, euro zone finance ministers decided Saturday, as the country's financial future spiraled into uncertainty.

In a surprise television address in the early hours, Prime Minister Alexis Tsipras proposed a national referendum on austerity demands from foreign creditors. But eurozone finance ministers later said the bailout program could not be extended until after the popular vote, and would expire on Tuesday as planned.

"It is the responsibility of the Greek government to meet its obligations, firstly with the (International Monetary Fund)," said Jeroen Dijsselbloem, chairman of the eurozone finance ministers. "It is a responsibility and it doesn't go away."

After failing to change the minds of international creditors at a meeting Saturday, Greek Finance Minister Yanis Varoufakis called the lack of a deal a "sad day for Europe."

With the debt crisis looming large, thousands of Greeks lined up to withdraw cash from ATMs Saturday after Tsipras' referendum proposal, fearing the country was closer than ever to defaulting on its massive loans.

"Our responsibility is for the future of our country. This responsibility obliges us to respond to the ultimatum through the sovereign will of the Greek people," Tsipras said.

The shock move drew anger in Brussels, where European leaders have been trying to reach a deal that will keep Greece in the euro currency zone.

"I am very negatively surprised by today's decisions by the Greek government,” Dijsselbloem told reporters before the emergency meeting to discuss the crisis.

"This is a sad decision for Greece because it has closed the door on further talks,” he said.

European leaders had offered to release billions of dollars in frozen aid if Greece accepted and implemented pension and tax reforms that are anathema to its leftist government, elected in January on a promise to end austerity.

If Athens defaults on repayments to the IMF, it will push Greece closer to being forced out of the euro, causing chaos for its economy and financial markets.

A default would not necessarily lead to Athens leaving the 19-nation euro currency area, but is expected to pave the way for it, worrying European leaders who fear it would undermine the principle that membership is irrevocable.

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