Greece warns of referendum ahead of debt deal meeting

Greek Finance Minister Yanis Varoufakis upped the stakes sharply ahead of Monday's crucial Eurogroup meeting in Brussels by raising the prospect of Greece holding new elections or even a referendum on any debt deal.
If eurozone ministers fail to accept seven major reforms Greece has put forward to unlock the next tranche of its much-needed bailout, "there could be problems", Varoufakis warned in an interview with Italian newspaper Corriere della Sera on Sunday.
"We can go back to elections. Call a referendum," he told the daily. "But, as my prime minister told me, we are not glued to our seats yet."
The last time Greece threatened a referendum on its bailout in November 2011, it sent global markets into panic, infuriated its European partners and led to the fall of then prime minister George Papandreou.
Varoufakis later slammed reports he was calling for a vote on whether to stay in the euro, claiming they were a part of "willful attempts to undermine the good course" of the Greek government's  discussions with its partners.
A source in the Greek government also denounced what it termed a media "deconstruction of Varoufakis". The finance chief has been criticised in Greece for his media omnipresence, with Prime Minister Alexis Tsipras telling him and other ministers to give fewer interviews, urging "fewer words and more action".
The thinly veiled referendum warning was echoed by Panos Kammenos, the leader of the radical leftist Syriza government's coalition allies, the Independent Greeks.
"If our creditors raise a question about the support of Greek people, a referendum is an option," Kammenos, the defence minister, told the Agora newspaper.
The huge public support enjoyed by the hard-left government has slipped markedly from 83 percent last month to 64 percent, according to a Marc poll published Saturday.
Varoufakis dismissed reports Greece was hoping to secure a new loan in his interview with the Italian media, given on the sidelines of a conference in Venice. He said the country would "not return to the mechanism of loans in exchange for a programme to be respected."
And he accused the European Union of hampering Greece's efforts to pull clear of a deep recession by spooking investors with warnings that Athens could crash out of the eurozone.
- 'War with the lenders' -
There was further fighting talk from Interior Minister Nikos Voutsis. He told parliament Friday that Greece "is at war with the lenders... Every month the leash is getting tighter for us. But in this war we won't proceed like happy scouts ready to follow bailout policies."
The Greek ministers' comments came as the European Central Bank took a hard line ahead of the Brussels meeting, saying it would not allow Athens to take out any more of the short-term loans it has been using to keep public services going.
ECB director Benoit Coeure told the German newspaper Frankfurter Allegemeine Sonntagszeitung that "the ECB cannot finance the Greek government. We're not allowed to. That is illegal."
However, Eurogroup chief Jeroen Dijsselbloem, as well as European Commission head Jean-Claude Juncker,  took a much more conciliatory line with the Dutch finance minister responding "positively" to the reforms proposed in a widely-leaked letter from Varoufakis, according to Greek government sources.
The measures include plans to streamline bureaucracy, raise revenue from online gambling and, in a suggestion that drew scorn on social media, hire an army of amateur tax sleuths -- including tourists -- to help clamp down on tax dodgers.
Dijsselbloem stressed the need to continue talks on the reforms, the state-run Athens news agency said.
Juncker warned the EU on Saturday to recognise the gravity of the situation in Greece -- both for the country's impoverished citizens and for the wider risks to the eurozone.
"We must be sure that the situation does not continue to deteriorate in Greece. What worries me is that not everyone in the European Union has understood how serious the situation is," Juncker told German paper Die Welt.
With reports last week of officials looking at borrowing money from state pension funds and EU farm subsidy payments to meet the country's huge debts, the Greek daily Kathimerini warned of "internal bankruptcy".
It claimed that according to official estimations, the Greek public sector needs around one billion euros more than had been planned to cover its obligations.