Greek Banks re-open after a three-week shutdown

Greek Banks re-open after a three-week’ shutdown
Greek Banks re-open after a three-week’ shutdown

AFP – Greek banks reopened Monday after a three-week shutdown imposed to stop a run on ATMs from crashing the financial system, but citizens woke up to widespread price hikes as part of a cash-for-reform deal with the country’s creditors.

Bank branches were doing steady trade, AFP reporters said, after a shutdown estimated to have cost the crisis-hit Greek economy 3.0 billion euros ($3.3 billion) since June 29th.

Greeks still face capital control measures, including a ban on most transfers to foreign banks, but a daily cash withdrawal limit of 60 euros ($65) has been relaxed.

Greeks are now able to withdraw a maximum of 300 euros at once until Friday, when a new weekly limit of 420 euros takes effect.

Meanwhile, a source close to the finance ministry confirmed that the government has begun making a 4.2 billion euro payment to the European Central Bank (ECB) and outstanding sums owed to the International Monetary Fund (IMF), made possible by a short-term “bridge” loan of 7.16 billion euros granted by the European Union on Friday.

The government agreed to tough reforms last week – including tax hikes, an overhaul of the ailing pension system and privatisations it had previously opposed – in exchange for a three-year bailout of up to 86 billion euros that it is hoped will stop it from crashing out of the Eurozone.

Taxes went up Monday on everything from sugar and cocoa to condoms, taxis and funerals, from 13 percent to 23 percent.

But the tax on medicines, books and newspapers eased from 6.5 percent to 6.0 percent.

Louka Katseli, the head of Greece’s bank association, said some 40 billion euros have been withdrawn from Greek banks since December by customers anxious over the safety of their deposits, seriously damaging the banks’ ability to function normally.

She urged people to bring their savings back to the banks to support the crisis-hit financial system.

“If we take out the money from our safes and our houses – where, in any case, it isn’t safe – and we deposit it in the banks, we will reinforce liquidity,” she told the Mega TV channel.

But it was not exactly business as usual in bank branches on Monday, and customers expressed frustration over the continuing restrictions on financial services.

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