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Greece Debt Crisis: Parliament Approves Referendum on Creditor Reforms

Thousands Attend Demonstration in Greece 0:35

Greece's parliament voted early Sunday in favor of Prime Minister Alexis Tsipras' motion to hold a July 5 referendum on creditor proposals for reforms in exchange for loans, with the country's future in the eurozone looking increasingly shaky.

Tsipras' surprise call stunned Greece's international debt negotiators, and the country took a big step closer to falling out of the euro currency union after fellow eurozone member states refused to extend its bailout program past its expiration date on Tuesday, leaving Greece on the brink of financial chaos.

In the streets of Greece, worried people queued outside banks for cash from dawn to dusk after Tsipras' announcement in the early hours of Saturday, after billions of euros had already been emptied in the preceding weeks.

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Greece has a 1.6 billion euro ($1.8 billion) debt due to the International Monetary Fund on Tuesday and its bailout program expires the same day, after which it is unclear how the country might survive financially.

The referendum is set for next Sunday with the question on whether to accept proposed reforms needed to get bailout loans from other eurozone countries and the IMF. The government is advocating a rejection of the proposals.

The radical left-wing leader accused the creditors of using blackmail and ultimatums against his proud but struggling people. European officials and all Greek opposition parties except the extremist far-right Golden Dawn party called his move for a vote a foolish and rash gambit that effectively ended negotiations to keep Greece financially afloat.

The sudden move comes after five months of stalemated negotiations, with Tsipras accusing creditors of trying to strong-arm his country into taking harsh austerity measures he says would hammer an economy already on its knees after months of creditor-demanded spending cuts and tax hikes.

The referendum move further crumbled already strained relations between Greece and its European partners.

Tsipras said the Greek people would vote against a deal next Sunday.

"This no will also be a big yes, a big yes to the decision of the Greek government to reject an ultimatum that insults the Greek people."