Monday, July 20, 2015

Greek debt crisis: Banks to open for first time in three weeks but withdrawal limits remain, government says

 

Greece's banks will open later today for the first time in three weeks but withdrawals will still be limited, a government official says.

People stand in a queue to use ATM machines to withdraw cash at a bank in Athens Photo: Greeks will be able to withdraw up to 420 euros per week, sparing people the ordeal of queuing at teller machines every day. (AFP: Aris Messinis)

Related Story: Greek banks to reopen Monday but capital controls remain: officials

Map: Greece

Greece's deputy finance minister, Dimitris Mardas, confirmed the banks would re-open, adding that services would also be "widened".

Greeks will be able to withdraw up to 420 euros at once per week, sparing people the ordeal of queuing daily at ATMs in the summer heat, which thousands did for three weeks for just 60 euros per day.

"If someone doesn't want to take 60 euros on Monday and wants to take it on Tuesday, for instance, he can withdraw 120 euros, or 180 on Wednesday," Mr Mardas told ERT television.

"This is a proposal we are processing and we think it's technically possible."

Capital controls will remain largely in place, including a block on money transfers to foreign banks and a ban on the opening of new accounts.

The three-week shutdown of the banking system is estimated to have cost the economy 3 billion euros ($4.4 billion) in market shortages and export disruption.

Greece last week had to agree to a tough fiscal package to earn a three-year bailout from its international creditors and avoid crashing out of the Eurozone.

For the first time in months, technical teams representing the creditors — the European Union, the European Central Bank and the International Monetary Fund — are expected in Athens next week to assess the state of the economy.

Tsipras facing internal revolt over bailout terms

The austerity package caused a mutiny among lawmakers of the ruling radical Syriza party, forcing prime minister Alexis Tsipras to carry out a limited reshuffle on Friday.

Even so, most analysts and even government officials said early elections were now inevitable, and are likely to be held in September.

Mr Tsipras, who barely has time to eat or sleep, according to his mother, faces a fresh challenge in parliament on Wednesday to approve a second wave of reforms tied to its economic rescue.

Pro-government newspaper Avgi on Sunday said the vote would be a "crash test" that could even result in the prime minister's resignation.

The Greek debt crisis explained

Greece's debt woes have been a longstanding problem, but the situation escalated over the European summer, as the country looked likely to default on its loans.

Crisis-hit Greeks will also have to endure widespread price hikes with a broad batch of goods and services — from sugar and cocoa to condoms, taxis and funerals — now taxed at 23 per cent, up from 13 per cent.

To sweeten the pill, the tax on medicines, books and newspapers eases from 6.5 per cent to 6.0 per cent.

German chancellor Angela Merkel on Sunday reiterated Berlin's tough stance ruling out debt forgiveness for Greece, but added that her government was open to more flexibilities in Athens' repayment schedule.

Ms Merkel told public broadcaster ARD that "there can't be a classic haircut — forgiving 30 or 40 per cent of debt — in a monetary union".

But she noted that Greece had received other forms of debt relief in recent years including a "voluntary write-down for private creditors, extended maturities and lower interest rates".

"We can discuss possibilities along those lines again," she said.

AFP/Reuters

From other news sites:

Greek debt crisis: Banks to open for first time in three weeks but withdrawal limits remain, government says - ABC News (Australian Broadcasting Corporation)

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