International Business
Greece Will Close Banks to Stem Flood of Withdrawals
The NewYork Times | By LANDON THOMAS Jr. and NIKI KITSANTONISJUNE 28, 2015
ATHENS — Greece will keep its banks closed on Monday and place restrictions on the withdrawal and transfer of money, Prime Minister Alexis Tsipras said in a televised address on Sunday night, as Athens tries to avert a financial collapse.
The government’s decision to close banks temporarily and impose other so-called capital controls — and to keep the stock market closed on Monday — came hours after the European Central Bank said it would not expand an emergency loan program that has been propping up Greek banks in recent weeks while the government was trying to reach a new debt deal with international creditors.
The debt negotiations broke down over the weekend after Mr. Tsipras said he would let the Greek people decide whether to accept the creditors’ latest offer. That referendum vote is to be held next Sunday, after the current bailout program will have expired.
Mr. Tsipras in his televised address criticized Eurozone finance ministers for refusing to extend Greece’s loan program, a decision that in turn prompted the the European Central Bank to decline to increase its emergency loans to Greek banks.
“It is clearer than ever that this decision has no other goal apart from blackmailing the Greek people and obstructing the smooth democratic procedure of the referendum,” he said.
Mr. Tsipras’s remarks did not include details of the bank closings and other controls on the movement of money, which the government was expected to explain later in the evening. Greece, though, appears to be taking steps similar to ones by Cyprus in 2013 to avoid a bank collapse.
In that case, however, the Cypriot government acted in concert with other European governments as part of a new bailout program. In Greece, the emergency banking measures were a result of a breakdown in talks with other eurozone countries. The breakdown has intensified pressure on cash-poor banks as jittery Greeks withdraw their savings.
When Greek officials huddled before Mr. Tsipras addressed the nation, it had not yet been decided how long the banks would remain closed or what cap would be placed on daily withdrawals from A.T.M.s, according to a person briefed on the discussion. But the person, who was not authorized to speak publicly, said that the daily limit could end up as low as 50 euros