RPT-Greece may find it is easier to close banks than re-open them

30 Jun 2015 | Author: | No comments yet »

Greek crisis live: Threat of legal action looms over creditor powers as default day finally arrives for Greece.

Athens – Tens of thousands of Greeks rallied on Monday to back their leftwing government’s rejection of a tough international bailout after a clash with foreign lenders pushed Greece close to financial chaos and forced a shutdown of its banking system.GREECE’S deepening debt crisis prompted bankers to pause, not panic, yesterday, and though markets dropped sharply they held above previous crisis lows. With a popular referendum on the bailout planned for Sunday, Prime Minister Alexis Tsipras put his own position on the line, saying he would respect the result of the vote but would not lead a government to administer “austerity in perpetuity”. “If the Greek people want to have a humiliated prime minister, there are a lot of them out there.

Euro zone stocks remained well ahead of where they were at the start of the year before the European Central Bank (ECB) started printing money, and while government borrowing costs shot up in Europe’s indebted southern countries – Italy, Spain and Portugal – they remained well below the heights scaled at the peak of the crisis in 2011/2012. “I’m firmly convinced that we will not see an unravelling of the European integration,” Axel Weber, the chairman of UBS and former ECB board member told a Swiss banking conference in Bern. “People all feel that there will be a rational solution. The show of defiance came at the end of a day that started with stunned Greeks waking up to face shuttered banks, long supermarket lines and overwhelming uncertainty over Greece’s future in the euro zone. His government is promising not to make its obligation to the Fund, and creditors have refused to extend the country’s bail-out for a month as it is due to hold a referendum on Sunday. Usually in Europe these rational solutions aren’t found until two minutes before the Asian market opens.” A clutch of German firms including real estate company Ado Properties and specialist lender PBB put their stock market debuts on ice after Greece inched closer to a default – but said they hoped to re-launch them later. “Anything for this week, people will hold back.

European leaders and policy makers, wrong-footed by Tsipras’ shock announcement of the referendum in the early hours of Saturday morning, warned that it would be a plebiscite on Greece’s future as a member of the single currency. But in a sign of the total breakdown in trust between the Leftist government and its partners, IMF chief Christine Lagarde has vowed to renege on this. Initial public offerings (IPOs) of Spanish cable firm Euskaltel and Swedish health care provider Capio were proceeding as planned after winning strong orders last week. Mr Tsipras was on Greek television last night and put on a defiant display in the face of threats from a concert of European leaders that Greece’s must now decide to stay or leave the euro. But one investor said bad news from Greece could start to have an impact. “I’m attending a meeting this week for another IPO, so roadshows are still going ahead,” said Neil Wilkinson, a European equities manager for Royal London Asset Management. “I think it depends how long we keep getting hit by negative headlines hour after hour though as that’s the kind of environment when you will start to see people sitting on their hands and companies will struggle to get away, irrespective of the quality of the company or the specific deal pricing.” Bankers advising companies on acquisitions said live deals were progressing despite the uncertainty because Greece constituted such a small part of the wider euro zone.

He also made a tacit admission that he would have to resign in the instance of a ‘Yes’ vote, saying he was not a PM who would seek to stay in office “in all weathers”. Belgian grocer Delhaize, which has 308 stores in Greece, was not immediately available to comment about whether the situation in the country could affect the pricing of its e25 billion (R304.5bn) merger with Dutch grocer Ahold. Drugmakers said they would continue to ship medicines to Greece in coming weeks despite unpaid bills, but warned that supplies could soon be in jeopardy without emergency action. There is no legal mechanism by which ejection can happen, and Mr Varoufakis told Ambrose Evans-Pritchard the country’s euro membership was not “negotiatiable” “We are taking advice and will certainly consider an injunction at the European Court of Justice. By midday, all three major US stock indexes were down more than 1 percent. “I can’t believe it,” said Athens resident Evgenia Gekou, 50, on her way to work. “I keep thinking we’ll wake up tomorrow and everything will be okay.

I’m trying hard not to worry.” After months of talks, Greece’s exasperated European partners have put the blame for the crisis squarely on Tsipras for rejecting a package they consider generous. The Greek side argues that pension cuts and tax hikes demanded of it would only deepen one of the worst economic crises of modern times in a country where a quarter of the workforce is already unemployed. EU Commission President Jean-Claude Juncker said he felt personally betrayed and told Greeks a “No” vote would be seen as signalling an exit from the euro – a position that other European leaders lined up to echo. French President Francois Hollande appealed to Tsipras to return to the negotiating table and German Chancellor Angela Merkel said she was ready to restart talks with Athens after the referendum, including on how to ease its debt burden. Hollande spoke to US President Barack Obama, and Hollande’s aide said they had agreed to work together for a resumption of talks and a solution to the crisis to ensure Greece’s financial stability.

The queues in my neighbourhood were too long yesterday,” said plumber Yannis Kalaizakis, 58, outside an empty cash machine in central Athens on Monday. Businesses complained that they could not pay salaries or suppliers and had to halt imports, while agricultural production was also expected to be affected.

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