Greece to re-open 1000 bank branches for pensioners from Wednesday

30 Jun 2015 | Author: | No comments yet »

Crisis arrives in Greece, but will it spread?.

European stocks fell again on Tuesday, extending the previous session’s decline as Greece looked certain to default on a €1.6 billion debt payment to the IMF ahead of a weekend referendum that could pave the way for its exit from the euro.The long wait for the next financial crisis is over, at least by one definition: When a government shutters the nation’s banks and people can’t get their money, that’s a crisis.The Greek government issued a decree in the early hours of Monday requiring banks to shut through July 6, citing an “urgent and unforeseen” need to protect the financial system.

A decree on banking controls has been published in the official Government Gazette stating banks will not open Monday and will stay shut through Monday, July 6.The Greek government in collaboration with the Hellenic Bank Association have decided to reopen about 1,000 bank branches on Wednesday that will cater for pensioners who do not use or possess debit cards.

The pan-European FTSEurofirst 300 index was down 1 per cent at 1,515.51 points in early morning trading extending falls after a 2.8 per cent slump on Monday. That happened Monday in Greece, prompting speculators who had bet on a European Union bailout to instead focus on the risk of contagion, dumping stocks and moving to safer government bonds in markets around the world.

Here’s the list of transactions that can still be processed by banks in Greece, including branches of foreign lenders, according to the decree published on the government gazette’s website: * Cash withdrawals from ATMs for as much as 60 euros ($66) per day, per card, per account. Greece’s Finance Ministry announced on Tuesday that the branches will be open until the end of the week and will service only those pensioners who cannot withdraw money from automated teller machines.

The banks have also been instructed to immediately issue debit cards to all retirees so that they may withdraw funds of up to 60 euros a day like everyone else. If anything, tumbling markets offer bargains for patient, long-term investors who save a little something from every paycheck and plow it into high-quality companies or index funds.

To save the country’s credit system, Greek authorities on Sunday established capital controls to limit financial transactions, closing banks for six business days beginning Monday. No restrictions are imposed on withdrawals using debit or credit cards issued abroad. * Greeks living or traveling abroad won’t be able to use their debit cards for transactions exceeding the 60 euro limit.

The finance ministry reiterated assurances that bank deposits would remain safe after Sunday’s referendum on the terms of a bailout agreement with foreign lenders which the government has rejected. Banks that violate the decree could be liable for fines equal to 10 percent of offending transactions and could be forced to dismiss employees who approved them.

In one of the biggest rallies seen in Athens, thousands of protesters took to Syntagma Square below parliament to demonstrate support for the government, which on Monday ordered banks to close until July 7th after ATMs ran dry. Greece’s prime minister Alexis Tsipras said he will “respect the outcome” of Sunday’s referendum and act in accordance with the Greek constitution, in a strong suggestion that he will resign if the public vote Yes. The Greek government has imposed capital controls in order to prevent the collapse of the banking system after several days of bank runs that followed the breakdown of negotiations between Greece and its international creditors.

In an live interview to Greece’s public broadcaster ERT, which his government reopened last month on the first anniversary of its overnight closure by the previous government, Mr Tsipras also rejected the suggestion, made by a number of European leaders earlier in the day, that a No vote will lead inevitably to a Grexit as he said it would prove too costly for the other side. Concerted efforts are under way to try and re-engage Athens with creditors, with senior EU figures insisting the door was still open for Greece to return to the negotiating table. As Greeks brace for the specifics on capital controls, Greece’s finance ministry has announced that the strict withdrawal limits will not apply to holders of credit or debit cards issued in foreign countries. Spooked by rumors concerning impending fuel shortages, drivers are flooding gas stations across Greece, leading the country’s largest refiner to issue a statement reassuring there are enough reserves. Cyprus’ finance minister says his own bailed-out country could consider writing off 330 million euros ($370 million) in rescue loans to Greece if there is a deal with other euro area member nations to lighten the country’s debt load.

Harris Georgiades said Sunday the amount is significant relative to the small economy of Cyprus, whose banks took a 4.5 billion euro loss after the 2012 decision to write down Greece’s government bonds. Georgiades said Cyprus supported extending Greece’s rescue program because it would be “catastrophic” for a country to stay locked out of international markets without having such a program in place.

Sunday’s move comes after two days of long lines forming at ATMs across the country, following Tsipras’ decision to call a referendum on creditor proposals for Greek reforms in return for vital bailout funds. Banking officials said lenders would remain shut for at least a day, with some media reporting the institutions would remain closed for at least a week. The European Central Bank has left unchanged the amount of emergency liquidity available to Greek banks, putting further pressure on the system and heightening the chances of capital controls being imposed. However, the commission said, neither the latest version of the document nor a deal could be finalized because of “the unilateral decision of the Greek authorities to abandon the process on the evening of 26 June.” International Monetary Fund head Christine Lagarde says she has briefed the IMF board on the “inconclusive outcome of recent discussions on Greece” and says the next few days will be important. He says “The Greek people’s proud ‘No’ will mark the continuation of negotiations to achieve a real and substantial solution and not an agreement that will recycle the problems.” The newspaper I Efimerida ton Syntakton published his comments Sunday.

The Greek vote next Sunday on approving creditors’ demands for Greece will be the country’s first referendum in 41 years — and the logistics of it are daunting. The referendum that Parliament approved early Sunday sees citizens voting July 5 on two creditor proposals — one of which is a very technical debt sustainability analysis. Varoufakis calls that idea “a very sensible transfer.” Asked directly, for the second time, whether Greece will pay up Tuesday, Varoufakis replies: “We are owed money by one part of the troika and we owe money to another part of the troika? Why don’t they sort themselves out and transfer money from one pocket … to the other?” The decision keeps a key financial lifeline open but does not provide further credit to Greece’s banks, which are seeing deposits drain away as anxious Greeks withdraw savings. The ECB said it was working closely with the Bank of Greece to maintain financial stability and added it could reconsider the decision on credit levels.

Information technology, which hasn’t boosted productivity measurably as a class since the 1990s, may be ready to yield new gains in fields as varied as robotics, service-industry automation and genetic medicine. Faced with the impossibility of knowing the future, the ancient Greek philosopher Epicurus advised students to avoid worry and fear, and live a self-sufficient life surrounded by friends. It has been allowing Greek banks to draw emergency credit from Greece’s central bank, a financial lifeline that has been keeping Greece’s four major banks going during the country’s tense bailout negotiations with creditors.

A separate poll by Kapa Research for the To Vima newspaper found 47.2 percent of respondents would vote in favor of a new, painful agreement with Greece’s creditors, compared to 33 percent who would vote no and 18.4 percent undecided.

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