Greek party leader urges calm after referendum call

A senior Greek politician on Saturday issued an assurance that banks would remain open and asked people to remain calm, hours after Prime Minister Alexis Tsipras announced a surprise referendum on bailout terms offered by foreign creditors.

Greek savers have pulled out billions of euros from lenders in recent days amid worries Athens could implement capital controls as it moves perilously close to a default that could result in its exit from the euro.

In the early hours of Saturday morning lines of people were seen forming to withdraw cash from automated teller machines in some parts of Athens.

By mid-morning, there were dozens queuing outside a branch of Piraeus Bank in central Athens, although that is not unusual as many Greeks who don't use cash cards come to banks on Saturdays. The bank was still closed nearly an hour after it was meant to open at 0730 GMT.

A senior executive at Piraeus said it intended to open the branch but was considering security issues because of the queues.

"Citizens should not be scared, there is no blackmail," Panos Kammenos, head of the government's junior coalition ally, told local television. "The banks won't shut, the ATMs will (have cash). All this is exaggeration," he said, echoing previous denials of plans to implement capital controls.

The plea came after Tsipras called a referendum on austerity demands from creditors, rejecting what he called an "ultimatum" and marking the latest twist in the five-month negotiations between Greece and its lenders.

Many banks in Greece are usually closed on Saturdays but some lenders keep open one or two branches for a few hours.

"The Bank of Greece is making a huge effort to keep ATMs fed with cash," an official at the central bank told Reuters.

Bailout demands

After a week of acrimonious talks in Brussels, Tsipras dismissed lenders' proposals as blackmail before flying to Athens to meet ministers. After midnight, he appeared on television to announce plans for a referendum on July 5.

Government ministers emerging from the cabinet meeting said they were confident Greeks would vote no and reject the bailout demands, leaving open the question as to whether the country had other options besides leaving the euro in such an event.

Reactions in Athens were mixed to the announcement, with politicians, newspapers and citizens lashing out at what they said was the creditors' attempt to turn Greece into a colony.

"The referendum, I think, is necessary in the sense that we must send a message to Europeans that the Greek people are not enslaved, we are no longer under occupation and I hope that they will take into consideration the loud 'No'," said Elias Papachadzis, a 49-year-old Athenian resident.

Others blamed Tsipras for setting Greece and Europe on a collision course.

"With a midnight address, the prime minister burdened the people with the responsibility of his resounding failure by announcing a referendum on July 5," said newspaper Eleftheros Typos in a front page editorial comment.

Greece's parliament convenes at noon (0900 GMT) to approve the referendum plan, just before euro zone finance ministers are due to meet in Brussels to discuss an aid offer from the European Commission, European Central Bank and the IMF.

One European official said the ministers would discuss a "Plan B" on preparing to limit the damage from a Greek default to Greek banks and other euro zone countries and markets if Athens rejects the offer.

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