The Greek government has decided to suspend the bank activity until July 6 and introduce measures to control the movement of capital to stop the leak and the flight of deposits of money from the country.
Every day, the citizens of Greece will be able to withdraw from ATMs not more than 60 euro. In addition, they are forbidden to transfer money abroad. These restrictions do not apply to foreign tourists, says the decision.
Greece is preparing to hold a referendum on July 5, in which citizens will vote whether to accept the conditions of the creditors. On the weekend, depositors en masse withdrew money from cards, emptying the ATMs.
The financial system of the country faces total uncertainty. The European Central Bank on Sunday decided to maintain the lending volume of Greek banks at the same level. If in the coming days, it decides to stop the support, in the banking system there won’t remain means and the only solution would be to start printing its own currency, writes The Wall Street Journal.
The question remains how the authorities will be able to restore confidence in banks and avoid a run on deposits after the bank will open.
Fearing the onset of financial turmoil, US Treasury Secretary, Jacob Lew, in a phone conversation with Greek Prime Minister Alexis Tsipras, urged the government "to take measures to maintain financial stability." Meanwhile, the White House announced that President Barack Obama and German Chancellor, Angela Merkel, in a telephone conversation discussed the "utmost importance" to find ways that will enable Greece to remain in the eurozone.
Tsipras said in a televised address that the uncompromising creditors, who refused to extend the program of aid to Greece after 30 June, are guilty for the closure of Greek banks. Addressing his fellow citizens, Tsipras urged them to "be patient" and "cold-blooded", writes agency Bloomberg.
The continuing of support of Greek banks, the scale of which is already about 90 billion euro, and has grown steadily since February, actually violates the rules of the European Central Bank. The support through the program Emergency Liquidity Assistance (ELA) became the only stable source of funding for Greek banks, which creates high risks for the Central Bank itself, and annoys other countries.
On Friday, it became known that the Greek government has rejected the proposal of international lenders, implying the extension of the program of financial aid to the country until the end of November and the provision of Athens with 15.5 billion euro.
In addition, the officials considered the proposed amount is not enough to meet the country's needs in financing.
Meanwhile, the deadline for reaching an agreement with creditors and prevent a default on the country's external debt is rapidly running out.