GREECE hurtled closer to a possible exit from the eurozone after Europe responded to the government’s call for a referendum by refusing to extend Athens’s desperately needed bailout.

    The referendum on bailout proposals by Greece’s creditors planned for July 5 was approved by the parliament late Saturday night, with at least 179 deputies out of 300 voting in favor.

    In a speech before the vote, leftist Prime Minister Alexis Tsipras said he was confident “the Greek people will say an emphatic no to the ultimatum” by the country’s EU-IMF creditors, but “a big yes to European solidarity.”

    The proposed referendum would ask Greeks to say “yes” or “no” to the measures submitted by creditors to Athens on Friday at one of the final rounds of negotiations going on since late February.

    Long queues formed at cash machines across Greece on Saturday, as fears mounted capital controls may be introduced as Athens looked all but certain to default on a huge IMF payment due Tuesday.

    The European Central Bank (ECB) met yesterday amid fears Greece’s banks will be unable to open this week, while Germany said the eurozone would do “everything” to stop contagion spreading through the single currency.

    Tsipras announced the surprise referendum in the early hours of Saturday saying he had rejected a debt deal because it involved further austerity measures that would cause “humiliation” to the Greek people.

    Angry eurozone finance ministers accused Greece of “unilaterally” breaking off talks and said they would not extend Greece’s bailout past Tuesday, the same day a 1.5-billion-euro (US$1.7 billion) payment to the International Monetary Fund falls due.

    “It was not us who walked away from the talks, it was the Greek Government that walked away,” a grim-faced Eurogroup president Jeroen Dijsselbloem said after tense talks in Brussels.

    But he added, “Our door is always open.”

    EU heavyweights Germany and France swiftly insisted Greece would remain inside the 19-country eurozone, even as fears grew about the future of the single currency itself.

    (SD-Agencies)