Monday, June 29, 2015
Banks will remain closed today Monday, for at least six working days, capital controls until referendum
Greek Prime Minister Alexis Tsipras has announced a temporary closure of banks, after the European Central Bank (ECB) said it would not increase additional emergency funding to the counry.
In a television address on Sunday, Tsipras said that the government will also start imposing capital controls ahead of a looming deadline on Tuesday.
The country needs to make a $1.8bn payment to the International Monetary Fund by Tuesday or risk defaulting on its obligations.
The emergency measures were agreed at a cabinet meeting after a gathering of
's systemic stability council, called
after Eurogroup eurozone finance ministers refused to extend its bailout beyond
Greek government officials have confirmed that banks will remain closed until July 6 - a day after the planned referendum on bailout deal offered by international creditors.
However, officials said that ATMs will reopen on Monday afternoon, with daily withdrawal limit set at 60 euros ($66).
The leftist government in a statement also clarified that tourists staying in
and anyone with a credit card issued
in a foreign country will not be affected by measures to limit bank withdrawals. Greece
Reuters news agency is also reporting that the Greek stock exchange will also be kept closed on Monday.
In a statement released earlier on Sunday, the ECB said: "Given the current circumstances, the Governing Council decided to maintain the ceiling to the provision of emergency liquidity assistance (ELA) to Greek banks at the level decided on Friday."
However, the ECB said it was working with the Bank of Greece to maintain financial stability in the country and that "the Governing Council stands ready to reconsider its decision" not to increase the amount of emergency funding.
The latest development came as the Greek parliament decided to back Tsipras' call for a referendum on the country's bailout deal with international creditors.
The referendum planned for Sunday July 5 was approved by at least 179 deputies out of a total of 300 politicians.
The creditors have not sought our approval but have asked for us to abandon our dignity. We must refuse.
Alexis Tsipras, Greek prime minister
Tsipras' leftist Syriza party and allied politicians voted in favour of the referendum that has angered its creditors who earlier rejected the debt-ridden country's request for a bailout extension.
In a speech prior to the vote, Tsipras said he was confident that "the Greek people will say an emphatic no to the ultimatum" by the country's creditors - the International Monetary Fund, ECB and European Commission.
"The day of truth is coming for the creditors, the time when they will see that
will not surrender, that Greece is not a game that has ended," he
said in an address to parliament laced with references to democracy and
national dignity. Greece
Grexit 'almost inevitable'
Tsipras also expressed confidence that "in the aftermath of this proud 'no', the negotiating power of the country [with the country's creditors] will be strengthened".
The move comes after five months of stalemated negotiations, with Tsipras accusing creditors of trying to strong-arm his country into taking harsh austerity measures he says would hammer an economy already on its knees after five months of creditor-demanded spending cuts and tax hikes.
Expert: Referendum plan a good idea
"The creditors have not sought our approval but have asked for us to abandon our dignity. We must refuse," Tsipras said during a nearly 13-hour parliamentary session that cumulated in a vote just before on Sunday.
Also on Sunday, European Council President Donald Tusk said that
must remain part of the euro single
currency area, adding that he was in touch with government leaders to prevent Greece dropping out of the monetary union. Athens
Anthimos Thomopoulos, the boss of Piraeus Bank, said that the banks would not open on Monday after leaving a meeting of the Greek financial stability council.
Greek crisis: Banks shut for a week as capital controls imposed - as it happened
Greek banks will not open until July 7 in an attempt to avoid financial panic, after ECB capped the emergency funds keeping them running
He made his remarks amid speculation that public holidays looked inevitable in Greece this week after the European Central Bank declined to increase its emergency financial lifeline to the Greek banks, cash that is keeping the country’s financial system functioning.
With Greece holding a controversial referendum on its creditors’ terms for its bailout in less than a week and the eurozone deciding to terminate the bailout on Tuesday, the pressure was on Mario Draghi, the president of the ECB, to make the call as to whether Greece would sink or swim.
In a finely calibrated decision, the governing council of the ECB decided on Sunday to leave the so-called emergency liquidity assistance to Greece at €89bn (£63bn), unchanged from last Friday.
“We continue to work closely with the Bank of Greece,” said Draghi.
Yannis Stournaras, the governor of the Bank of Greece and a member of the ECB council, said: “The Bank of Greece, as a member of the Eurosystem, will take all measures necessary to ensure financial stability for Greek citizens in these difficult circumstances.”
The decision to maintain life support supplied a little oxygen to a Greece in the throes of suffocation. On the other hand, no fresh funds were made available while Greeks resorted in ever-increasing numbers to withdraw their savings from ATMs, meaning that bank reserves were running low and not being replenished.
It was one of the the most momentous decisions in the ECB’s brief history and came after the Greek parliament upped the stakes when it voted 178 to 120 in favour of holding the referendum proposed by the prime minister, Alexis Tsipras, on Friday. Embarrassingly for his radical left-led coalition, the neo-Nazi Golden Dawn party joined it in endorsing the proposal, which has to be approved by Greece’s president, Prokopsis Pavlopoulos.
As his debt-laden country edged ever closer to exit from the eurozone, queues formed at ATMs in many parts of Athens. Lines of cars waited at petrol stations and supermarkets reported a higher than usual volume of sales as Greeks bought in stocks to see them through a possible crisis. Yet in the centre and more fashionable areas, there was a slightly unreal air of normality.
That was not the only paradox in the fast-evolving crisis. If the head of state gives his blessing to a referendum next Sunday, Greeks may be called to vote on a proposal from Greece’s creditors that will no longer be on offer.
The latest proposal from the ECB, the International Monetary Fund (IMF) and the European commission was based on Greece’s bailout programme, which is due to expire on Tuesday. But on Saturday the so-called Eurogroup of eurozone finance ministers turned down Tsipras’s request for a one-month extension so the referendum could be held without external pressures.
According to two polls published on Sunday, the prime minister faces an uphill battle to secure the rejection he has indicated that he favours. One in the right-leaning tabloid Proto Thema found 57% of those interviewed favoured acceptance of the creditors’ latest offer. Another in the centre-left To Vima put support at 47%.
Syriza’s MPs voted in a bloc for the referendum, together with their coalition partners from the radical right Anel party. They were joined by 16 of Golden Dawn’s 17 lawmakers. One Syriza MP and a Golden Dawn member were absent from the vote, which was taken in the early hours of Sunday.
Austria’s finance minister, Hans Jörg Schelling, intensified the drama, telling the daily Die Presse that Greece would have to leave the EU before leaving the eurozone. He said its departure from the single currency “appeared almost inevitable now” but that this would only be possible if Athens first asked to leave the European Union and other countries agreed to its request.
“It’s clear that one country can under no circumstances blackmail the European commission and the euro countries,” the paper quoted Schelling as saying.
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