ECONOMY

Banks shut at least till Monday

banks-shut-at-least-till-monday

The government is setting a 1,000-euro limit on the amount of cash travelers can take out of Greece, according to a ministerial decision issued on Wednesday, which also extends the bank holiday by another three working days. This means Greek bank branches will not reopen before Tuesday, July 14.

The new decision also allows pensioners without cash cards to receive another 120 euros at the branches that will be open for that purpose around the country. The unemployed who qualify for benefits and people who receive pensions from foreign funds will also be able to withdraw the same amount.

Bank officials estimate that the existing liquidity will suffice with the capital controls until Monday, but stress that difficulties will arise unless the European Central Bank increases the limit of emergency liquidity assistance (ELA) on that day. They add that without an agreement between the government and its creditors, along with an ELA increase, it will be unlikely that ATMs will be able to issue even the 60 euros per bank account as of Monday.

If there is an agreement, they say, then the ECB will immediately raise the ELA ceiling while it is also likely banknotes will be sent to Greece. Senior bank sources stress that if there is a deal by Sunday then banks could reopen on Tuesday, but with capital controls remaining in place.

The ECB Governing Council convened on Wednesday and decided against raising the ELA ceiling from the 89 billion euros set late last month, as well as against further increasing the haircut on the value of collateral Greek banks use to draw liquidity from the Eurosystem.

ECB Governing Council member Christian Noyer underscored that Sunday is the last chance for Greece, adding that Frankfurt cannot support Athens without the prospect of an agreement.

Noyer noted that the ECB has already stretched the regulations to their limits to support the Greek banking system in terms of liquidity.