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Greek debt crisis: banks reopening

The Greek banks have finally reopened today after being closed for three weeks, although capital controls still remain in place and payments abroad will not be possible. The stock market will also remain closed until further notice.

Limits on cash withdrawals are more flexible and have been upped to €420 per week, instead of the previous €60 per day. The head of the Greek bank association, Louka Katseli has said; “capital controls and restrictions on withdrawals will remain in place but we are entering a new stage which we all hope will be one of normality” [1].

Bankers have said that minor disruptions are expected and that many services will still be off limits.

This follows the third bail-out offer, yet to be secured, earlier this month which will help keep Greece afloat. The tough new conditions under the bail-out will see tax hikes, pension cuts and strict curbs on public spending.

According to the Guardian today, Greece has received a €7 billion bridge loan of which it has already spent to repay the European Central Bank and the International Monetary Fund [2], covering the first debt repayment that was due in June and the second repayment due of last week.

In exchange of this, Greece is hoping to receive further loans of up to €86 billion. Although, it is certain that Greece’s creditors will lie down strict rules on debt relief to build its trust back up with the country.

George Katrougalos, Greece’s new Labour Minister has said he remains hopeful that Greece will “keep on fighting” [3].

[1] The Telegraph. ‘Greece crisis: banks reopen after three weeks’. http://www.telegraph.co.uk
[2] The Guardian. ‘Greek debt crisis: banks reopen but stock market still closed – live updates’. http://www.theguardian.com/business
[3] The Telegraph. ‘How the Greek crisis changed Europe forever’. http://www.telegraph.co.uk