adminAthens — Greek banks will remain shut beyond Monday “by probably two days”, a finance ministry source said as authorities struggled to contain the economic damage from a two-week closure brought about by a cash shortage. A new expiration date for the bank holiday was to be announced later yesterday, the source told AFP.
Junior finance minister Dimitris Mardas had earlier met with the management of leading banks on the issue.
The banks have been closed since June 29, with withdrawals by Greeks limited to €60 after the government called a referendum on EU-IMF creditors’ terms for an international bailout.
To the surprise of many Greeks, including members of the ruling Syriza party, an even harsher set of terms was accepted by the Greek government yesterday.
The ECB is currently keeping Greek banks – and by extension the Greek economy – afloat via its Emergency Liquidity Assistance (ELA) facility, but it has frozen total aid at €89bn.
Yesterday, the ECB decided to keep the ELA steady hours after eurozone leaders hammered out a three-year bailout package for Greece worth up to €86bn, in return for tax hikes, pension reform and tough privatisation pledges.
The bank restrictions have badly disrupted the operation of the already weakened Greek economy, mostly limiting consumer purchases to food and fuel for the past two weeks.
But authorities have been careful not to disrupt the busy tourism season by sparing foreign card holders from withdrawal restrictions.
Greek Economy Minister Yiorgos Stathakis last weekend said banks would reopen in the event of a bailout deal, but capital controls would have to stay in place for months.
“If there is a deal, banks will reopen very soon, within the week as soon as the ECB (European Central Bank) provides ELA,” Giorgos Stathakis told the BBC.
But, he added, “capital controls will take a few months to be totally removed.”
Meanwhile, US stocks rose in opening trade yesterday, joining a global rally after Greece reached a deal with eurozone leaders that permits it another bailout.
Five minutes into trade, the Dow Jones Industrial Average was at 17.926.50 up 166.09 points. The broad-based S&P 500 rose 0.80 percent to 2.093.25, while the tech-rich Nasdaq Composite Index gained 0.90 percent at 5.042.57.
Under the deal, Greek Prime Minister Alexis Tsipras is required to push through the Greek parliament a series of tough austerity measures on pensions and taxes by tomorrow.
After that happens, Greece can begin formal negotiations on a three-year bailout worth up to €86bn.
The JSE strengthened yesterday morning after a deal was reached between Greece and the eurozone on negotiations for a new bailout package for the debt-ridden Geek government. The market was however not on an exuberant run but moved cautiously after a strong opening, as many bridges still have to be crossed before a solution can be found for the economic crisis in Greece.
Although the Greek government has agreed to strict austerity measures, the Greek parliament must approve legislation to implement these measures by tomorrow for the negotiations on a new bailout package to start.
These measures will be met with stiff resistance by members of the leftist ruling party and could lead to the fall of the Greek government and new elections later this year.
The JSE opened strongly but major indices then mostly moved sideways. The All-share index was at that stage at 52.187 points, 0.75 percent higher than Friday’s closing level but 1 point lower than the opening 52.188 points.-AFP.
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