Just a few hours ago Greek PM Tsipras addressed his nation imploring then to "remain calm" and reassuring them that their "deposits were safe." It appears the Greeks did not believe him. Many were wondering where the Greek bank lines were for the past several months. Turns out the local depositors were merely waiting until just after the last minute to withdraw their funds... horde gas... and stack food. Greece, it appears is Venezuela - the new socialist paradise.
Tsipras implored: "Keep Calm...."
They did not listen...
We have seen this before - in Russia recently as the Ruble collapsed and citizens spent any and every piece of currency they had on 'assets'.
Of course, however, the spending surge can only be short-term and will stop as soon as there are no more euros to spend.
Update 2: Greece's Skai reports that if/when banks reopen (supposedly on Tuesday), a 60€ withdrawal limit will be imposed.
Update: In a televised address to the nation, Greek PM Alexis Tsipras assured Greeks that their deposits are safe despite an upcoming bank holiday and despite the fact that Greek stocks will not open for trading on Monday. Tsipras also said Athens has re-applied for a bailout extension and urged Greeks to "remain calm" in the face of what is sure to be a turbulent week.
Despite the reassurances from any and all elected (and unelected) officials, given the run on bank ATMs in Greece has turned into a stampede, it is not surprising that:
- GREEK BANKS TO REMAIN CLOSED FROM MONDAY FOR A WEEK: PIRAEUS BANK CEO
- PIRAEUS BANK CEO THOMOPOULOS SPEAKS TO REPORTERS IN ATHENS
The announcement was made when Piraeus Bank CEO Anthimos Thomopoulos told reporters after a meeting of the government’s financial-stability panel on Sunday. The launch of capital controls just as the Greek summer tourism season starts, is sure to be the final crushing blow to Greece, whose entire economy will now grind to a halt.
Banks will remain shut until at least after a July 5 referendum called by Prime Minister Alexis Tsipras on whether to accept austerity in exchange for a European bailout, Kathemerini newspaper reported, citing unnamed sources.
Reuters is also reporting that the Greek stock market will not open on Monday (leaving us wondering just what that will do to the Greek ETFs liquidity in US markets) as hedgers scramble to protect un-closablelosses wherever they can.
More from Reuters, which reports that "Greece's banks, kept afloat by emergency funding from the European Central Bank, are on the front line as Athens moves towards defaulting on a 1.6 billion euros payment due to the International Monetary Fund on Tuesday."
The ECB had made it difficult for the banks to open on Monday because it decided to freeze the level of funding support it gives the banking system, rather than increasing it to cover a rise in withdrawals from worried depositors.
Amid drama in Greece, where a clear majority of people want to remain inside the euro, the next few days present a major challenge to the integrity of the 16-year-old euro zone currency bloc. The consequences for markets and the wider financial system are unclear.
The head of Piraeus Bank, one of Greece's top four banks, speaking after a meeting of the country's financial stability council, said banks would be shut on Monday while a financial industry source told Reuters the Athens stock exchange would not open.
"It is a dark hour for Europe....nevertheless from where we're sitting we have a clear conscience," Greek Finance Minister Yanis Varoufakis said earlier in an interview with the BBC.
Greece's left-wing Syriza government had for months been negotiating a deal to release funding in time for its IMF payment. Then suddenly, in the early hours of Saturday, Tspiras asked for extra time to enable Greeks to vote in a referendum on the terms of the deal.
Creditors turned down this request, leaving little option for Greece but to default, piling further pressure on the country's banking system.
The creditors want Greece to cut pensions and raise taxes in ways that Tsipras has long argued would deepen one of the worst economic crises of modern times in a country where a quarter of the workforce is already unemployed.
Pro-European Greek opposition parties have united in condemning the decision to call the referendum on the bailout terms, but people on the streets of Athens backed the decision.
"I want him (Tsipras) to knock his fist on the table and to say 'enough!'," said resident Evgenoula.
Many leading economists have voiced sympathy with the Greek government's argument that further cuts in spending risk choking off the growth which would give Greece some prospect of servicing debts worth nearly twice its annual national income.
The IMF has pressed European governments to ease Athens' debt burden, something most say they will only do when Greece first shows it is trimming its budget.
Long lines formed outside many ATMs on Sunday, including some of 40 to 50 people outside some in central Athens.
The Bank of Greece said it was making "huge efforts" to ensure the machines remained stocked.
A Greek exit could lead to a humanitarian crisis on Europe's southern rim, spark contagion in euro countries that are only just emerging from years of deep recession, and stoke a fiery new debate about German austerity policies and Merkel's handling of the crisis.
For months, the notoriously cautious Merkel has been wrestling with the question of whether to risk a "Grexit" and accept the financial, economic and geopolitical backlash it would surely unleash.
If Greece ends up leaving the euro zone anyway, many in Germany and elsewhere will blame the left-wing government of Greek Prime Minister Alexis Tsipras that came to power in January. It has infuriated its partners with what they have perceived to be an erratic, confrontational stance in the debt talks.
Tsipras's call on Friday for a referendum on Europe's latest bailout offer, only days before Greece is due to run out of cash, made it easy for Merkel, 60, to say enough is enough, and threaten to pull the plug once and for all.
But it will be Merkel, more than any other European leader, who will have to sort through the rubble of a "Grexit" and answer the question of why disaster was not averted.
Allowing Greece to exit would be by far the boldest move she has taken since coming to power nearly a decade ago, far riskier than her decision in 2011 to phase out nuclear power.
In private conversations Merkel has acknowledged as much, saying her biggest fear is that Germany could be blamed for "blowing up Europe" for the third time in a century.
With a British referendum on its membership in the European Union looming, the standoff with Russia over Ukraine unresolved and the continent struggling to find answers to a migration crisis and growing threat from Islamic extremists, chaos in Greece would send a horrible signal to the world about the state of Europe.
"Europe's internal crisis is playing out in a dangerous, unstable geopolitical environment," former German Foreign Minister Joschka Fischer wrote in a recent article for Project Syndicate. "Preventing the EU from falling apart will require, first and foremost, a strategic solution to the Greek crisis."
In recent weeks, Merkel has come under criticism for letting Schaeuble take the lead in the negotiations with Greece, even though his scepticism is well known.
As far back as 2012, the German finance minister was arguing that the euro zone might be better off without Greece. In his 2014 memoir "Stress Test", former U.S. Treasury Secretary Timothy Geithner described Schaeuble's stance, laid out in a meeting between the two on the North Sea island of Sylt three years ago, as "frightening".
Still, it is difficult to fault Merkel for not pushing hard for an agreement behind the scenes. Back in March, during Tsipras's first visit to Berlin as prime minister, she spent over five hours with him at a dinner in the Chancellery going through Greek reform pledges line for line.
"What we told the Greeks is that if they came up with a viable plan, then Merkel would fight for it," a senior aide said after the meeting.
For now, the sense that she did her best to reach a deal with Tsipras, and the widespread feeling in Germany that the Greek government has behaved irresponsibly in the negotiations, is likely to ensure broad domestic support.
And Germany's allies in Europe and beyond could also begin to question her handling of the crisis.
The United States, worried about the geopolitical consequences of Greece leaving the euro at time of rising global threats has been pushing hard behind the scenes for Merkel to keep Athens in the currency bloc at all costs.
In a sign of this concern, U.S. Treasury Secretary Jack Lew called Schaeuble, his French counterpart Michel Sapin and IMF Managing Director Christine Lagarde over the weekend, pressing them to agree a "sustainable solution" for Greece that includes debt relief - a step Merkel has resisted.
More worrying than complaints from Washington would be cracks in the European consensus on Greece.
France has toed the German line until now. But at a decisive meeting of euro zone finance ministers on Saturday, France broke with Germany and other countries, arguing in favor of extending Greece's bailout to allow a referendum to take place, euro zone officials said.
The French were slapped down and the Greek request for an extension denied. Now Merkel, barring a miraculous eleventh hour deal with Athens, must face the consequences.
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