Sunday 23 October 2016

Taoiseach admits Ireland came close to Greek-style meltdown

Alexis Tsipras
Alexis Tsipras

Banks in Greece closed yesterday as the financial crisis there deepened, and Taoiseach Enda Kenny admitted he once feared a similar situation in Ireland

He said that in 2011 the Government was warned "it might be necessary to restrict capital outflows from banks and indeed have the Army surround ATM machines".

Mr Kenny (inset) said Ireland came close to a Greek-style crisis, but accepted six years of austerity as the price for escaping its own 2010-2013 bailout.

The Taoiseach confirmed he had arranged for meetings this week for the Irish Government to reflect on what a possible Greek exit would mean for Ireland.

READ MORE: 'I love Greece, we'll have to see how it pans out' - bar owner

However, he said there was a need for "very calm reflection" on the issue. He also hit out at Greece's surprise decision to hold a referendum on the bailout offer, saying it was unfair to other EU democracies.

He said Greece's approach was making economic matters worse for its own citizens, and he urged Greece to "come back to the table".

Mr Kenny said Greek Prime Minister Alexis Tsipras was making an unreasonable demand on other EU members to extend today's deadline for repayment of international loans.


He said this would require votes in many parliaments, and Mr Tsipras was wrong to unveil referendum plans only a few days before the deadline.

Meanwhile, in Greece yesterday, pensioners lined up just after dawn at bank branches hoping they would have access to their pensions, which were due to be paid.

Overnight, massive queues formed at petrol stations, with worried motorists seeking to fill up their tanks and pay with credit cards while they were still being accepted.

The bank closures came after Greeks rushed to ATMs over the weekend to withdraw money following Mr Tsipras' surprise call for a referendum.

The referendum has been set for Sunday, and the government has been advocating that Greeks vote against the proposals.

Bank transaction restrictions mean people are limited to daily withdrawals of €60 per person per ATM card.

Although credit and cash card transactions have not been restricted, most retailers were not accepting cards yesterday.

The capital controls are meant to stem the flow of money out of Greek banks and spur the country's creditors to offer concessions before Greece's international bailout programme expires today.

Once that happens, Greece loses access to the remaining €7.2bn of rescue loans, and is unlikely to be able to meet a €1.6bn debt repayment to the International Monetary Fund, also due today.

The accelerating crisis has thrown into question Greece's financial future and continued membership in the 19-nation shared euro currency - and even the European Union.

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