Tuesday, April 7 2020


Greece orders banks closed for a week after run on ATMs

Update: June, 29/2015 - 11:20

ATHENS — Greece announced early on Monday it will shut banks for a week and impose capital controls, pleading for calm after anxious citizens emptied cash machines in a dramatic escalation of the country's debt crisis.

Banks will be closed until July 6 – the day after a referendum on bailout proposals – with a 60-euro (US$65) limit on ATM withdrawals, but foreign tourists, a vital engine of the Greek economy, will be exempt from the restrictions, an official decree said.

In the first market reaction to the growing risk of a Greek euro exit, the Tokyo and Sydney stock markets plunged almost 2 per cent at the open on Monday morning, while the euro briefly tumbled to less than $1.1.

The drastic measures to protect Greece's banking system against the threat of mass panic came after the European Central Bank said it would not increase its financial support to Greek lenders despite early signs of a chaotic bank run.

It capped a weekend of high drama that began with the leftist premier's unexpected call for a July 5 referendum on creditors' latest reform proposals after bailout talks in Brussels collapsed.

In response, angry EU and IMF creditors rejected a request to extend the nation's bailout beyond its June 30 expiry date, sparking fears Greece could default on a key debt payment to the IMF due the same day and possibly crash out of the eurozone.

Uncertainty over how events will unfold in coming days prompted crowds to form long queues outside some ATMs in Greece, leaving many cash machines dry.

Keen to stave off panic, Tsipras assured Greeks their deposits were "totally safe". "Any difficulties that may arise must be dealt with calmness. The more calm we are, the sooner we will get over this situation," he said, adding that Athens had again requested a "prolongation of the (bailout) programme".

With the Athens stock exchange closed on Monday, other global markets were expected to follow Asia's lead in what is set to be a highly volatile day of trade as investors return to their desks to find Greece hurtling towards default.

"We have had a slow bank jog in Greece and most thought that there would be an agreement eventually, at the last minute. That is no longer true," said Emma Lawson, a senior currency strategist at National Australia Bank. — AFP

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