Post by thunkerdrone on Jun 28, 2015 8:36:00 GMT -5
www.dailymail.co.uk/news/article-3141480/Hundreds-queue-outside-banks-fears-Grexit-grow-ahead-MPs-vote-bailout-referendum.html#ixzz3eMa2cTz4
Shock vote on terms of bailout pushes Greek banks to the brink of meltdown as long queues form at country's cashpoints
By Simon Walters And Glen Owen For The Mail On Sunday
Updated: 12:16 GMT, 28 June 2015
Greek banks were on the brink of meltdown last night after the shock announcement that its crisis-hit government would hold a referendum on the terms of a fresh international bailout.
Long queues formed outside the country’s cashpoints after prime minister Alexis Tsipras accused the International Monetary Fund and eurozone of trying to blackmail his country – and pledged to give the Greek people the final say in a vote next weekend.
Mr Tsipras described the bailout plan as ‘humiliation’, condemned ‘unbearable’ austerity measures demanded by creditors and said he would campaign for a ‘no’ result.
Ticking clock: Greece's bailout programme expires on Tuesday, after which it is not clear whether its banks would be able to avoid collapse
Ticking clock: Greece's bailout programme expires on Tuesday, after which it is not clear whether its banks would be able to avoid collapse
Last night, finance ministers in Brussels raised the stakes further by refusing to extend its bailout to allow Greece to meet a £1.2 billion payment due to the IMF on Tuesday – setting the country on a path to default.
Jeroen Dijsselbloem, Dutch president of the eurogroup of finance ministers, warned even a ‘yes’ vote in a Greek refer-endum might not be enough to get a deal, if the government did not fully support the plan
‘If it is a “yes”, in the meantime there are major problems for Greece. If it is a “yes”, the question is: who are we trusting, who are we working with to then implement the program?’
With fears growing that the country’s banks could grind to a halt this week, the Greek authorities are expected to consider imposing capital controls as early as tomorrow morning.
Thousands of British tourists would be among those affected by the measures, which include restricting cash withdrawals and curbing electronic transfers from the Greek system.
The Association of British Travel Agents and Foreign Office advise taking various methods of payment if traveling to Greece, including cash
The latest and most serious twist in the crisis came after a leaked diplomatic cable claimed David Cameron had told a fellow EU leader that it ‘might be better’ for Greece to withdraw from the eurozone, to allow it to fix its economy.
The chaos also galvanized Tory Eurosceptics, who claimed it demonstrated the need for the UK to vote to leave the Union in the 2017 referendum.
Conservative MEP Dan Hannan said: ‘Greece is a vivid warning of where the European process ends – with total loss of control.
‘It shows us that if we stay in the EU we’ll be giving our consent to a process of integration that will end with a European state. We used to be told that the EU was essential to our prosperity. Looking at the eurozone today, does anyone still believe that?’
Finally it seems this storm is about to break, writes City editor SIMON WATKINS
The moment of truth looms. Greece now teeters on the brink of bankruptcy and the eurozone on the verge of what was once unthinkable – losing one of its member states.
A week today Greeks will vote in a referendum on whether to accept the latest bailout proposals – but aside from that fact, almost nothing else is knowable for certain.
Eurozone officials have reportedly claimed that Greeks will have nothing on which to vote. Having rejected the last terms offered by the International Monetary Fund and other creditors, is there even a plan available for the Greek people to reject or accept?
The next five days will be the most dramatic yet in this long-running drama. Greece is almost certain to default on the €1.6 billion it is due to pay the IMF on Tuesday – the same day its existing bailout expires.
But in fact, neither of these dates represents the immediate crisis. The weakest link in the shattered Greek economy is its banks, which are already all but insolvent.
Customers have been withdrawing money in vast quantities ever since Syriza came to power, fearing that if Greece is thrown out of the single currency their euro savings will be converted into drachma – likely to be worth far less.
In the last week, the sums being taken out have risen to well over one billion euros a day, moved either to foreign banks or stashed in notes under mattresses.
It has been a slow and steady run on Greece’s banks which is now speeding up – for the finish line may well be in sight. Until now, the country’s banks have been kept afloat by €88 billion in loans from the European Central Bank. The crucial choice now facing the ECB, and which it will meet today to decide, is whether to lend even more.
Under its own rules, it cannot lend to banks which are insolvent. With Greece looking likely to default on its debts, the case is becoming harder to argue.
The ECB’s choice is stark. It can keep funding the Greek banking system – which may infuriate some EU officials and voters – or it can pull the plug.
If it stops extending loans, then Greece’s banks will quite simply run out of cash, and crisis control may have to be imposed. Cash withdrawals may be restricted or even stopped, while customers could also be prevented from moving money electronically out of bank accounts.
Greek politicians have insisted this will not be the case, but their view seems heroically optimistic.
The ECB may have to face this decision within hours. The storm may finally be about to break over Greece.
Assurance: The Bank of Greece issued a statement today assuring that the flow of cash to ATMs will not be interrupted, but reports claim banks in Greece's second city Thessaloniki have already run out of money
Assuarance: The Bank of Greece issued a statement today assuring that the flow of cash to ATMs will not be interrupted, but reports claim banks in Greece's second city Thessaloniki have already run out of money
Some Downing Street advisers believe the turmoil in Greece will convince Brussels to grant more concessions to the UK in the negotiations leading up to the 2017 poll.
Should Greeks vote against the new bailout, most economists believe Greece will be forced to quit the single currency and return to the drachma. The country could even eventually be forced out of the EU, though Greek politicians have long argued a Grexit would not be the automatic result of default.
However, next week’s referendum is likely to be billed as, in effect, an in-out vote on the euro.
Howard Archer, chief UK and European economist at research group IHS Global Insight, said he still believed a deal was possible if Greeks voted in favour.
But he admitted the odds had worsened. ‘It is obvious what the creditors want the Greek Government to do is very different from what they were elected to do, so I do think the Greek government is between a rock and a hard place.’
Even if Greeks do vote ‘yes’, there are some doubts about whether that will be in time, with some European officials reportedly warning that there may be no bailout offer available by next Sunday.
Thousands of Greeks rally in support of EU membership
Creditors: The referendum will ask the Greek people to decide on a proposal of reforms made by the country's creditors on Thursday
Creditors: The referendum will ask the Greek people to decide on a proposal of reforms made by the country's creditors on Thursday
Despair: The government has rejected the proposal and recommends that its people do the same. If that happens it is not clear whether Greece would have to leave the euro, or would be given more time to renegotiate
Despair: The government has rejected the proposal and recommends that its people do the same. If that happens it is not clear whether Greece would have to leave the euro, or would be given more time to renegotiate
Mistakes: Former prime minister Costas Karamanlis broke a longstanding silence and severely criticised the government's 'foolish choices'
Mistakes: Former prime minister Costas Karamanlis broke a longstanding silence and severely criticised the government's 'foolish choices'
Tsipras promises to 'find a fair solution' with creditors
Graffiti: A mural depicting a hooded man holding the sign of the Euro in his bleeding hands in Athens
Graffiti: A mural depicting a hooded man holding the sign of the Euro in his bleeding hands in Athens
Uncertain future: It is unclear whether Greece will be allowed to keep the euro after Tuesday's deadline passes
Uncertain future: It is unclear whether Greece will be allowed to keep the euro after Tuesday's deadline passes
Read more: www.dailymail.co.uk/news/article-3141480/Hundreds-queue-outside-banks-fears-Grexit-grow-ahead-MPs-vote-bailout-referendum.html#ixzz3eMbY0uGm
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