Greece crisis: Banks reopen for first time in three weeks

Greek banks are reopening for the first time in three weeks, but with restrictions on withdrawals still in place, as German chancellor Angela Merkel said the government would have to move fast on any new bailout terms.

The cautious reopening of the banks, and an increase in value added tax on restaurant food and public transport from Monday, are aimed at restoring trust inside and outside Greece after an aid-for-reforms deal last week averted bankruptcy.

Greeks will be able to withdraw €420 a week at once instead of just €60 a day, but capital controls will remain.

“That’s not a normal life so we have to negotiate quickly,” Dr Merkel said in extracts from an interview with German public broadcaster ARD.

Greek prime minister Alexis Tsipras is trying to turn a corner after he reluctantly agreed to negotiate a third bailout, allowing the European Central Bank to top up emergency credit lines but prompting a rebellion in his leftist Syriza party.

The head of Greece’s banking association Louka Katseli urged Greeks to do the opposite of what they had done for months and put cash back into their bank accounts rather than withdraw more.

“Tomorrow when the banks reopen and normality is restored, let’s all help our economy. If we take our money out of chests and from our homes – where they are not safe in any case – and we deposit them in the banks, we will strengthen the liquidity of the economy,” she told Skai television on Sunday.

Reducing debt

Dr Merkel said it would be possible to talk about changing the maturities of Greece’s debt or reducing the interest Athens has to pay after the first successful review of the new bailout package to be negotiated.

Berlin, the biggest contributor to euro zone bailouts, would do all it could to bring talks to a successful conclusion but would “negotiate hard” to ensure Athens stuck to agreements, she said.

“That certainly won’t be easy because there are things that we have discussed with all of the Greek governments since 2010 that have never been done, but that have been done in other countries like Portugal and Ireland,” she said.

In Athens some were sceptical that the bank reopening would change much in a recession-hit country with over 25 per cent unemployment rate.

“The banks opening tomorrow won’t change anything for me,” said hotel worker Joanna Arvanitaki (31). “I never used to withdraw €60 a day – €60 is what I had a week for my expenditure.”

– (Reuters)