Sunday

25th Jun 2017

Greeks can withdraw €60 a day

  • Authorities considered making an exception for pensioners who don't have bank cards (Photo: Spyros Papaspyropoulos)

Greek banks did not open Monday (29 June), beginning a week full of financial and political uncertainties for Greece and the eurozone.

Greek prime minister Alexis Tsipras Sunday announced a bank holiday for the six days in the run-up to the referendum on 5 July, where Greek citizens are to be asked their opinion on reform proposals by the country’s creditors.

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Large queues formed in front of Greek banks on Sunday night, and many banks were reportedly out of cash Monday morning.

Starting from Monday, and until 6 July, Greeks will only be able to withdraw just €60 a day, and any transfer of money to another country will have to be approved by the government.

People with foreign cards will not be affected by the withdrawal limit, a measure designed to reassure tourists as the summer season starts.

Several countries including Germany, the Netherlands, Belgium, and the UK have issued warnings to holidaymakers, advising them to take as much cash as possible with them.

Credit card payments are not affected by the capital control measures. Tsipras also said on Sunday that the electronic payment of pensions and wages would be guaranteed.

But some pensioners, who have no credit card and almost no cash in their pockets, were waiting outside banks on Monday morning, according to reports. The authorities were considering making an exception and opening banks just for them on the day.

The minister for citizens' protection met police authorities and asked them to increase the number of patrols in the country, especially around banks, for fear of social unrest.

There were unconfirmed reports on Monday morning that the police is now stationed at previously unguarded parts of the parliament in Athens.

The bank holiday is part of capital controls decided after the European Central Bank decided to leave untouched the level of the Emergency Liquidity Assistance to the Greek banks, at €89 billion.

The decision allowed Greek banks to dispose of capital but not to compensate the massive withdrawals which have been accelerating in recent weeks.

According to Greek banking sources, €1.3 billion was withdrawn on Saturday and Sunday morning after Tsipras announced the referendum, triggering a collapse of the negotiations with Greece's creditors in Brussels.

Early on Sunday afternoon, finance minister Yanis Varoufakis was still saying on Twitter: "Capital controls within a monetary union are a contradiction in terms. The Greek government opposes the very concept."

But the fear of a bank run and collapse of the Greek banking system pushed Tsipras to announce capital controls in a television address to the country.

Tsipras said that the rejection, by the Eurogroup, on Saturday of his government's demand for an extension of the bailout programme after 30 June "was an unprecedented act by European standards, questioning the right of a sovereign people to decide".

"This decision led the ECB today to limit the liquidity available to Greek banks and forced the Greek central bank to suggest a bank holiday and restrictions on bank withdrawals", he said.

Greeks also queued at petrol station on Sunday night, prompting the authorities to issue a statement saying there is enough "fuel reserves for several months".

The Athens Stock Market will also close for a week.

On Monday morning, the European Commission said it found the capital control measures "prima facie justified".

"Maintaining financial stability is the main and immediate challenge for the country", the commissioner for financial services Jonathan Hill said in a statement.

He added: "While the imposed restrictive measures appear necessary and proportionate at this time, the free movement of capital will however need to be reinstated as soon as possible in the interest of the Greek economy, the eurozone, and the European Union's single market as a whole".

Tsipras announces capital controls

Greece is to become the second eurozone country to impose capital controls on Monday, in a bid to prevent the collapse of the country’s financial system.

Tsipras calls shock referendum

Greece will hold a referendum next Sunday on whether to accept its latest bailout offer, prime minister Alexis Tsipras has stated.

Feature

Athens on edge as referendum looms

Three days before the referendum, closed banks, frequent demos, and streams of leaflets are a reminder that the future of Greece is at stake.

Varoufakis back in push for ECB transparency

The former Greek finance minister Yanis Varoufakis and German left-wing MEP Fabio De Masi want to know whether the European Central Bank overstepped its powers when putting capital controls on Greek banks in 2015.

Focus

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At a summit in Brussels, EU and Chinese leaders will attempt to deepen ties on trade and climate as US president Trump plans to pull out of the Paris climate deal.

Italy reaches EU deal on failing bank

After months of negotiations, the European Commission and Italy agreed on the terms of rescue for Monte dei Paschi di Siena bank, including job cuts, salary caps and private sector involvement in the bailout.

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