‘Grexit’ to ‘Greferendum’: Athens on the brink of default

Greek Finance Minister Yanis Varoufakis waits for the start of a meeting of eurogroup finance ministers in Brussels on Saturday, June 27, 2015. Anxiety over Greece’s future swelled on Saturday after Prime Minister Alexis Tsipras’ call to have the people vote on a proposed bailout deal increases the risks that the country might fall out of the euro. AP

BRUSSELS, Belgium – It is past midnight on Saturday when the phone rings on the 13th floor of the European Commission, bringing news the EU is facing an unprecedented crisis after last-ditch talks with Greece collapsed.

Only a few hours earlier Greece’s leaders had agreed to continue talks to avoid a default on the country’s debts that could force it to crash out of the single currency and even the European Union.

But now the government led by Prime Minister Alexis Tsipras has made the shock announcement that any deal with Greece’s creditors — the EU, European Central Bank and International Monetary Fund — will be put to a public referendum.

In Brussels, a sense of stupor prevails. The decision comes at the worst moment, in the final stage of negotiations when “98-99 percent” of the deal had already been agreed, according to a participant in the talks.

The mood is still somber hours later as EU ministers begin to arrive for their fifth round of discussions in 10 days to end months of cash-for-reforms wrangling and years of economic crisis in Greece.

“This is not the first time that the Greek government has created more and more drama,” said the Slovakian Finance Minister Peter Kazimir.

Fatigue and frustration reign among EU negotiators sick of the negotiating style of Athens’s left-wing leaders, with one official quipping that they “learn the state of the talks via leaks” to the press.

Greece’s Finance Minister Yanis Varoufakis — seen in Brussels as a key troublemaker in the talks because of his abrupt, and flamboyant, style — arrives dressed all in black.

In the meeting room, those on the other side of the negotiation table keep their distance. Varoufakis “lives in a parallel reality,” says one diplomat.