The Latest: No bank withdrawal limits on foreign cards
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The Latest: No bank withdrawal limits on foreign cards
Jun. 29, 2015
ATHENS, Greece (AP) — The latest developments on Greece's bailout negotiations (all times local):
A decree on banking controls has been published in the official Government Gazette stating banks will not open Monday and will stay shut through Monday, July 6.
Greece could shorten or lengthen this period. ATMs are set to reopen early Monday afternoon at the latest. Even then, withdrawals are limited to 60 euros ($66) per day.
Visitors and other holders of credit and cash issued abroad are exempt from the restrictions. Anxious tourists had been spotted queuing at ATMs Sunday, thinking the restrictions, which had been known but not yet specified, would apply to them.
A special provision is made for Greek pensioners, many of whom don't use ATMs.
Web banking transactions will be mostly allowed, allowing people to pay their bills online. However, they cannot move money to accounts abroad. Special provisions could be made for remittances to Greek students and patients abroad.
As Greeks brace for the specifics on capital controls, Greece's finance ministry has announced that the strict withdrawal limits will not apply to holders of credit or debit cards issued in foreign countries.
This is seen as a necessary move after worries that tourists were seen joining locals in front of ATMs on Sunday. Any similar restriction would hurt tourism, Greece's one thriving industry, which accounts for at least a fifth of economic activity.
Meanwhile, a marathon Cabinet meeting to discuss the capital controls has ended after 8 hours.
Spooked by rumors concerning impending fuel shortages, drivers are flooding gas stations across Greece, leading the country's largest refiner to issue a statement reassuring there are enough reserves.
Refiner Hellenic Petroleum says that "we maintain fuel reserves for several months. The supply of our refineries with crude oil is also assured."
In fact, the rush to the gas stations has been prompted less by worries about shortages than rumors that only withdrawals of up to 60 euros ($66) per day from ATMs will be allowed and that use of credit or debit cards will not be permitted.
Cyprus' finance minister says his own bailed-out country could consider writing off 330 million euros ($370 million) in rescue loans to Greece if there is a deal with other euro area member nations to lighten the country's debt load.
Harris Georgiades said Sunday the amount is significant relative to the small economy of Cyprus, whose banks took a 4.5 billion euro loss after the 2012 decision to write down Greece's government bonds.
But he said Cyprus would be "willing to accept any mutually agreed arrangement that would further decrease Greece's debt."
Georgiades said Cyprus supported extending Greece's rescue program because it would be "catastrophic" for a country to stay locked out of international markets without having such a program in place.
He said any Greek rescue program should be reform-oriented instead of raising taxes.
Greek Prime Minister Alexis Tsipras says the Bank of Greece has recommended that banks remain closed and restrictions be imposed on transactions, after the European Central Bank didn't increase the amount of emergency liquidity the lenders can access from the central bank.
Sunday's move comes after two days of long lines forming at ATMs across the country, following Tsipras' decision to call a referendum on creditor proposals for Greek reforms in return for vital bailout funds.
Tsipras gave no details of how long banks will remain closed or what restrictions will be placed on transactions. Banking officials said lenders would remain shut for at least a day, with some media reporting the institutions would remain closed for at least a week.
Prime Minister Alexis Tsipras has called a Cabinet meeting tonight, starting at 8 p.m., after a dramatic day which saw Greeks flocking to ATM machines to withdraw what money they could, fearing limits would be placed on banking transactions imminently.
The move comes after Tsipras called for a referendum on creditor proposals for Greek reforms in return for bailout cash — a decision which shocked Greece's European partners.
The country's negotiations with its European creditors have been suspended, with both sides accusing each other of being responsible.
The European Central Bank has left unchanged the amount of emergency liquidity available to Greek banks, putting further pressure on the system and heightening the chances of capital controls being imposed.
The European Commission says it has released the text of its proposals on Greek reforms, which are the documents Greek Prime Minister Alexis Tsipras has asked his countrymen to vote on in a referendum.
The Greek government is advocating a no vote in next Sunday's referendum, saying the proposals were humiliating for Greece and would have pushed the country's already devastated economy further into recession.
But the proposals Greeks are being called on to vote for haven't been officially released until now, or translated into Greek.
The commission said it was releasing the text of the proposals "in the interests of transparency and for the information of the Greek people."
It said discussions had been ongoing with Greek authorities on Friday night on the proposals, and that any agreement would have "addressed future financing needs and the sustainability of the Greek debt."
It has been a longstanding demand of Tsipras' government that creditors offer some sort of debt write down or forgiveness, arguing the country's debt is too big to be repaid.
However, the commission said, neither the latest version of the document nor a deal could be finalized because of "the unilateral decision of the Greek authorities to abandon the process on the evening of 26 June."
International Monetary Fund head Christine Lagarde says she has briefed the IMF board on the "inconclusive outcome of recent discussions on Greece" and says the next few days will be important.
She says she shared her "disappointment and underscored our commitment to continue to engage with the Greek authorities." Lagarde says she welcomed promises by the eurozone's finance ministers and the European Central Bank "to make full use of all available instruments to preserve the integrity and stability of the euro area."
The IMF chief said she backed a balanced approach "to help restore economic stability and growth in Greece, with appropriate structural and fiscal reforms supported by appropriate financing and debt sustainability measures."
A spokesman for Greece says it was the creditors who ended bailout negotiations by presenting an ultimatum.
Government spokesman Gabriel Sakellaridis predicts that ultimatum will be rejected in next Sunday's referendum — and says that will allow talks on Greece's financial future to resume on a sounder basis.
He says "The Greek people's proud 'No' will mark the continuation of negotiations to achieve a real and substantial solution and not an agreement that will recycle the problems." The newspaper I Efimerida ton Syntakton published his comments Sunday.
Sakellaridis said the government will respect the result of the referendum but did not say whether it would apply the creditors' measures or resign if the Greek people voted to accept the proposals.
The Greek vote next Sunday on approving creditors' demands for Greece will be the country's first referendum in 41 years — and the logistics of it are daunting.
The referendum that Parliament approved early Sunday sees citizens voting July 5 on two creditor proposals — one of which is a very technical debt sustainability analysis. These have not even been translated yet into Greek.
Others argue the vote won't be on documents, it will be a vote on whether or not Greece stays in the euro.
Ballot officials for each voting precinct must be called up, but these must be headed by lawyers, who often have to travel to remote places.
The last Greek referendum was when voters abolished the monarchy in 1974.
Greece's finance minister is suggesting that his country might not pay the 1.6 billion euros ($1.8 billion) it owes to the International Monetary Fund on Tuesday.
Greek Finance Minister Yanis Varoufakis refused to reply to a direct question Sunday on the payment. Instead, he told BBC radio that the European Central Bank should pay the money to the IMF out of the profits it made on Greek bonds in 2014. Varoufakis calls that idea "a very sensible transfer."
Asked directly, for the second time, whether Greece will pay up Tuesday, Varoufakis replies: "We are owed money by one part of the troika and we owe money to another part of the troika? Why don't they sort themselves out and transfer money from one pocket ... to the other?"
The European Central Bank has announced it is maintaining emergency credit to Greek banks at its current level.
The decision keeps a key financial lifeline open but does not provide further credit to Greece's banks, which are seeing deposits drain away as anxious Greeks withdraw savings.
The ECB said it was working closely with the Bank of Greece to maintain financial stability and added it could reconsider the decision on credit levels.
ECB head Mario Draghi said "we continue to work closely with the Bank of Greece and we strongly endorse the commitment of Member States in pledging to take action to address the fragilities of euro-area economies."
France's prime minister is urging Greece and other nations to do whatever they can to keep Greece in the 19-nation bloc that uses the euro currency.
French Prime Minister Manuel Valls said Sunday that "we don't know — none of us — the consequences of an exit from the eurozone, either on the political or economic front. We must do everything so that Greece stays in the eurozone." He was speaking on France's i-Tele TV.
Valls added that "means respecting Greece and democracy, but it's also about respecting European rules. So Greece needs to come back to the negotiating table."
Greek Prime Minister Alexis Tsipras' call for a national referendum on creditors' demands has thrown Greece's negotiations with its international lenders into turmoil.
Germany's Foreign Ministry is advising travelers to Greece to ensure they have enough cash on them before they depart.
An updated version of the ministry's travel advice issued Sunday noted that people seeking to withdraw cash in Greece could face "significant waits" and possible shortages at cash machines.
Worried Greeks were lining up at ATM machines on Sunday, the day after the Prime Minister Alexis Tsipras called for a referendum on creditors' financial proposals in return for rescue loans and creditors refused to extend Greece's international bailout beyond Tuesday.
While some machines in Greece were running out of cash, others were being replenished. Another top Greek financial official urged Greeks on Sunday to remain calm and not withdraw all their savings.
The European Central Bank faces a major decision.
It has been allowing Greek banks to draw emergency credit from Greece's central bank, a financial lifeline that has been keeping Greece's four major banks going during the country's tense bailout negotiations with creditors. The ECB has been slowly increasing the emergency credit to compensate for the increase in withdrawals from Greek banks.
But the ECB has said it can only continue such assistance if the banks are basically solvent. A failure by Greece's government to get more aid before its bailout ends Tuesday and a big payment to the International Monetary Fund is due could prompt the ECB to decide the Greek banks are not financially solid any more.
Capping the aid would quickly force Greek banks to limit withdrawals — but such controls could take Greece a step closer to leaving the 19-nation eurozone.
ECB President Mario Draghi has said it's up to elected officials to decide Greece's fate. Analysts say the central bank wants to give politicians every chance to negotiate a deal.
Two opinion polls indicate most Greeks want to keep using the shared euro currency and would prefer a deal with Greece's European partners rather than a rupture.
The polls published Sunday were both conducted before Prime Minister Alexis Tsipras declared early Saturday that he was calling a referendum on financial proposals made by Greece's creditors in return for continuing to fund the country with bailout loans. Still, they provide an indication of public sentiment.
In the poll by Alco for the Proto Thema Sunday paper, 57 percent said they believed Greece should make a deal with its EU partners while 29 percent wanted a rupture. A separate poll by Kapa Research for the To Vima newspaper found 47.2 percent of respondents would vote in favor of a new, painful agreement with Greece's creditors, compared to 33 percent who would vote no and 18.4 percent undecided.
Both nationwide polls were conducted from June 24-26. The Alco poll had a margin of error of 3.1 percent while Kapa Research's was 3.09 percent.
A Greek finance official says the government expects the European Central Bank to continue approving emergency liquidity assistance that Greek banks can draw even after Tuesday, when Greece's international bailout officially expires.
The ECB was expected to meet Sunday to decide what action to take about Greece. The central is bank is under pressure to end that emergency assistance.
A decision by Prime Minister Alexis Tsipras to call for a national referendum on creditor demands in exchange for bailout loans has thrown Greece's negotiations with its international lenders into turmoil. In response, other nations in the 19-nation eurozone are refusing to extend Greece's bailout program beyond its Tuesday expiration date.
Alternate Greek Finance Minister Nadia Valavani told private Mega television on Sunday "we are expecting the funding of Greek banks to continue normally via the ELA after Tuesday."
Worried Greeks have formed lines at ATM machines all weekend and some machines were running out of cash Sunday morning.
Valavani said the country's banks could see "business as usual" next week if they receive the emergency support "so long as there is calm" and Greeks don't attempt to withdraw all their savings.