Roundup: Eurogroup meeting on Greece to start amid Tsipras' surprise referendum call

The Eurogroup meeting are going to start on Saturday amid a dramatic turn after Greek Prime Minister Alexis Tsipras surprisingly announcing a referendum on the latest creditors' proposal.

The meeting is scheduled to start at 2:00 p.m. local time (1300 GMT) on Saturday and will be the fifth one in 10 days discussing an aid offer from the European Union and the IMF to Greece. The agenda of the meeting of the 19 finance ministers is unclear after Tsipras' referendum call.

Greece was reported to apply at this meeting for a short extension of the ongoing aid program to give time to the referendum. Athens was offered on Thursday a five-month extension of the ongoing bailout to December, with loans worth of 15.5 billion euros (about 17.4 billion U.S. dollars) financial aid in four installments already set aside for Greece.

Greek government sources said that Greek government turned down this proposal and described it as "inadequate".

Athens argued that the proposal did not represent a substantial solution and even in the short term it did not resolve financing issues leading to a new bailout.

After returned to Athens from a summit in Brussels, Tsipras announced in a television address late Friday that his government will put the creditors' proposal to a popular vote on July 5.

Tsipras said the question will be acceptance or rejection of the creditors' proposal in early Saturday's televised speech, urging his people to reject the austerity demands.

Greece's parliament is due to hold an emergency session on Saturday at noon local time with an aim to approve the referendum plan, just before the Eurogroup meeting in Brussels.

The referendum which analysts say will put Greece into uncharted waters and risking a default and Grexit. Teneo Intelligence expert said in a note that the risk of Grexit increased considerably from 20 percent to at least 50 percent.

Saturday's Eurogroup meeting was preceded by one on Thursday afternoon when Greece delivered a latest reform proposal minutes before the start of the meeting. The finance ministers failed to reach a deal, saying the institutions need time to "assess the latest proposals by the Greek authorities".

"The institutions informed us that on a number of issues there is still a wide gap with the Greek authorities. In the meantime, the door is still open for the Greek authorities to accept the proposals tabled by the institutions," Eurogroup President Jeroen Dijsselbloem said at the exit doorstep of the Thursday's Eurogroup meeting.

With only four days left to the June 30 deadline when the Greek bailout program expires and Athens needs to repay a 1.5 billion euro loan installment to the IMF, uncertainty whether a reforms for cash agreement would be finalized on time prevailed. (1 euro = 1.12 U.S. dollars) Endit