Greece holding crisis meet as bank run looms
Print Edition
THE European Central Bank declined to grant extra cash to help Greece’s stricken banking system yesterday as the government weighed up drastic new measures to contain a growing financial crisis.
As the Greek crisis intensified after talks between Athens and its creditors broke down on Saturday, Greek citizens have queued at bank machines, heaping pressure on the government to impose capital controls.
Finance Minister Yanis Varoufakis and the central bank chief were set to meet yesterday for an emergency meeting of the “systemic stability council,” amid increasing signs of a bank run.
Since Friday night, 1.3 billion euros (US$1.45 billion) have been withdrawn from Greek banks, said the head of the bank workers’ union Stavros Koukos.
A banking source in Greece who requested anonymity said only 40 percent of ATMs now had money in them.
Germany’s foreign ministry suggested that its citizens traveling to Greece “take sufficient amounts of cash” with them.
Varoufakis, pressed in a BBC interview on whether Athens would limit bank withdrawals and overseas transfers, said only that “this is a matter that we’ll have to work overnight on with the appropriate authorities both here in Greece and in Frankfurt.”
Bank of Greece chief Yannis Stournaras said his bank “will take all measures necessary to ensure financial stability for Greek citizens in these difficult circumstances.”
The Frankfurt-based ECB’s governing council earlier held an emergency telephone conference and pledged to keep emergency liquidity assistance — keeping open its life-support for Greek banks and, by extension, the Greek state.
However, it pledged no fresh cash for banks, ratcheting up pressure on the Greek government to slap on controls to save lenders from the run on deposits.
Greece, after five years of turmoil, appeared to head into the uncharted, and likely turbulent, waters of a long dreaded “Plan B.” The long festering crisis took a sharp turn for the worse when leftist Greek Prime Minister Alexis Tsipras stunned Europe with a surprise call for a July 5 referendum, which has been approved by the Greek parliament, on the latest cash-for-reforms package and advised voters against backing a deal that spells further “humiliation.”
For Tsipras, austerity has been a “humanitarian catastrophe” for his country of about 11 million people, which has endured five years of recession, turmoil and skyrocketing unemployment.
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