Wednesday 26 October 2016

Greece shuts down banks as euro exit edges closer

Greeks yesterday queued to take their money out of banks after news broke that the country's stock exchange and banks would be closed today.

The closure is a response to the Troika's refusal to extend the bailout. The standoff between Athens and the Troika is now at a dangerous new level, with most experts expecting that Greece will tomorrow become the first western country to default on an IMF loan.

The European Central Bank decided yesterday not to give Greek banks any extra money to help them out as worried Greeks withdrew their savings. The cashing of cheques is to be halted and fixed-term deposits are to be locked down.

Officials said the bank closure would last for several days and would be accompanied by limits on bank transfers abroad and withdrawals from ATMs.

Tourists will also struggle to get cash, and anyone travelling to Greece is advised to bring money with them.

"It is a dark hour for Europe. Nevertheless, from where we're sitting we have a clear conscience," Greek finance minister Yanis Varoufakis said.

For months Greece's left-wing Syriza government has been negotiating a deal to release funding in time for its IMF payment.

Then, in the early hours of Saturday, prime minister Alexis Tspiras asked for extra time to enable Greeks to vote in a referendum on the terms of the deal.

Creditors turned down this request, leaving little option for Greece but to default, piling further pressure on the country's banking system.

Long queues formed outside many ATMs yesterday, including some of 40 to 50 people in central Athens.


The Bank of Greece said it was making "huge efforts" to ensure ATMs remained stocked.

The German foreign ministry said tourists heading to Greece should take plenty of cash to avoid problems with banks. Some tourists said they were joining the queues at ATMs.

"I am trying to go over to the bigger banks," said Cassandra Preston, a Canadian tourist. "I am here for another month and I would like to make sure I have some cash on me."

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