Banks reopen, Greece pays billions of euros to creditors
Print Edition
GREECE’S government hiked taxes and began paying billions of euros to its creditors yesterday, as banks reopened just days after the debt-laden country reached a reforms-for-cash deal with its European partners.
Greeks woke up to widespread tax rises — on everything from sugar and cocoa to condoms, taxis and funerals — as part of the tough reform package agreed last week in exchange for a three-year bailout of up to 86 billion euros (US$93 billion) aimed at keeping Greece from crashing out of the eurozone.
The nation’s banks were thronged with customers after a three-week shutdown estimated to have cost the economy 3 billion euros. The banks were ordered to close on June 29 to prevent mass cash withdrawals that could have caused the financial system to collapse.
Banks are continuing to offer only limited services — with a ban on most transfers to foreign banks among the capital control measures still in place — but a daily cash withdrawal limit of 60 euros has been relaxed.
Bank tellers were dealing with a hectic stream of customers, many expressing frustration over continuing restrictions on financial services.
“I came today to collect my pension but unfortunately I could only get a small percentage of it,” said Spyros Papasotiriou as he left his bank in the northern Athens suburb of Neo Psychiko. “It’s a big hassle.”
The International Monetary Fund meanwhile confirmed that Greece is no longer in default on its loans after remitting about 2 billion euros to make up for missed loan repayments.
The payment was made possible by a 7.16 billion euro emergency bridge funding granted to Greece on Friday by the EU so it could pay the IMF, as well as an additional 4.2 billion euros due to the European Central Bank.
Value-added tax has gone up from 13 percent to 23 percent on a wide range of goods and services, although the tax on medicines, books and newspapers eased from 6.5 percent to 6 percent.
Tryphon Alexiadis, the new finance vice minister in charge of tax, vowed that “not a single euro from the tax rise will escape state coffers,” adding that “a wave of inspections will be launched” to prevent tax evasion in a country where the problem is notoriously rife.
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