A man holding a Greek flag walks on central Syntagma square in Athens..
(photo credit: REUTERS)
German Economy and Energy Minister Sigmar Gabriel on Sunday canceled a planned visit to Israel marking 50 years of German-Israeli economic ties to focus on the Greek euro crisis.
For months, Greece has been negotiating the outlines of a continued bailout plan to keep it afloat. But prospects for a deal faltered dramatically over the weekend.
Despite signs of optimism from negotiators, Greek Prime Minister Alexis Tsipras announced he would put the deal on discussion to a national referendum on July 5. He urged his countrymen to vote against the proposal.
The referendum will force Greek voters to choose between an austerity and reform package demanded by European creditors and the International Monetary Fund, or a rejection of such measures, which is likely to force Greece out of the euro zone. Through the weekend, Greeks fearful of capital controls and a run on their banks lined up to withdraw their funds.
The timing of the referendum, five days after Greece is likely to miss a €1.5 billion loan repayment to the IMF, has also raised concern that events will spiral out of control before a single ballot is cast.
IMF Managing Director Christine Lagarde said the organization will not give Greece leeway on the payment deadline. The European proposal in question on the referendum would no longer be on offer by next Sunday’s vote, she said.
German Deputy Minister Brigitte Zypries will fill in for Gabriel on the trip, which is set to include a business delegation from major German companies including Merck, Deutsche Telecom, Deutsche Bank, SAP, Bosch and BMW. The delegates are to take part in a Israel-Germany Innovation Day event that will include Economy Minister Arye Deri and executives from major Israeli businesses.
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