Monday, June 29, 2015

Only The Beginning...





Bill Fleckenstein – This Is Only The Beginning Of A Massive Global Crisis And Full-Blown Panic, Plus A Bonus Q&A | King World News



With the Dow closing below 17,600 and bonds surged, today one of the greats in the business sent King World News a fantastic piece warning this is only the beginning of a massive global crisis and full-blown panic, plus a remarkable bonus Q&A that includes everything from the chaos in Greece to gold, silver, what investors should be doing with their money and more.

 As everyone now knows, the weekend saw a trifecta of major news. Obviously, the first piece of news was the calling of the Greek referendum, which basically will lead to a lose/lose choice between chaos and more chaos (more about that below).

Then there was the rate cut and reserve requirement reduction on the part of the Chinese, and lastly, the move on the part of the governor of Puerto Rico, who said the country needed to get out of its "death spiral" and would make creditors take a haircut — something "authorities" and central bankers have been loath to see occur, as they continually try to protect lenders and bond holders worldwide from having to pay for their bad decisions. Besides generalized central bank bad policy and incompetence, not forcing creditors to take a hit has only increased moral hazards….

Turning to Greece, as I noted, the referendum basically comes down to two bad choices. Boiling this down to the most simplistic terms, if the people vote no, as Greek Prime Minister Tsipras has advised, then basically Greece is out of the euro (though he thinks they can stay). If they vote yes (on a deal that no longer exists, by the way), they are going to need a new government, and that will be an even bigger mess, given how long that will take. While the Greeks have maintained a preference for the euro, they don't want any part of more austerity.

They have tried to have it both ways: pursue insane policies, but have a real currency. That jig is now up. My guess right now would be that the Greeks will vote no, because much of the disruption that would in theory occur for them if they headed out of the euro — i.e., bank closures and currency controls — have already happened. So much of the chaos for the average person has been seen (though it has only just begun). If Greece does leave it would force its creditors to take haircuts, bring about a new currency, and runaway inflation, but that sequence of events has occurred many times in the past.

Having said all that, as I have maintained all along, the situation will remain fluid. I suppose it is possible that if the Greeks vote yes, the EU, ECB, and the Germans would find a way to put some sort of a crazy deal together, but I'm not sure the genie will go back in the bottle. Here is why: both sides are trapped, as European leaders think Greece has been "ring fenced," and Tsipras thinks that a "Grexit" will cause so much damage that Europe won't let it happen. However, there is no way the EU leaders can give in to Greece because Portugal, Italy, and Spain will all want less austerity as well.

As I thought about all of this over the weekend, the markets I most wanted to pay attention to as far as ferreting out information about where this is headed were European debt markets, especially Portugal, Italy, and Spain. As one might imagine, those markets all declined today, though not all that violently, as rates rose 25 to 35 basis points, more or less, on 2%-ish handles. For what it's worth, Greek debt jumped 350-ish bps to 14%-plus.

Obviously, the ECB has been buying European government debt, which has helped drive the price to the ridiculously low yields they are now where no credit risk has been priced in. Not to make too much out of just one day's action, but I think the biggest development in terms of exposing the fallibility of central banks, which bulls worldwide have come to conclude are infallible, will be if weaker European government debt trades lower.

 The rapid change in the status quo in Greece just shows how, when you play these games of who will blink first, which the ECB and Greece are playing with each other, an outcome like a Greek default can go from impossible to inevitable in the blink of an eye (as I have tried to point out on many occasions). That sort of dislocation continues to be what I think is in store for U.S. stocks. Remember, there are huge expectations for earnings in the second half that I don't think will be met. Add in all the new macro problems and potential chaos in Europe and why anyone would want to bet that stocks are going higher is beyond me.








The deteriorating situation in Greece—including long lines and a 60 euro ($67) limit at ATMs—could get much worse if voters there refuse to accept creditor-imposed reforms in a referendum this coming Sunday, said billionaire Wilbur Ross, who has a large interest in the country. 
"Once there's social unrest, which there will be before too long if this thing continues, no tourist is going to want to go to [Greece]," Ross told CNBC's "Squawk Box" on Monday. "If the Greek people understand how limited those concessions that are requested are, and contemplate going into the abyss on other side, they're never going to pick the abyss."
Last year, the chairman and CEO of WL Ross & Co. and other international financiers invested $1.8 billion in Eurobank—becoming the biggest shareholder of Greece's third-largest bank. He said Monday he made the bet thinking the current government would not be in power. 
Ross said there are lines at Eurobank branches, but surprisingly they're "not totally out of control yet."

Debt talks between Greece and its creditors collapsed late Friday, after Greek Prime Minister Alexis Tsipras announced a national vote for his people to decide on whether they're willing to accept reforms in exchange for more bailout aid. Sunday's referendum may effectively turn out to be a vote on whether Greece stays in the common currency. 
"I don't see how Mr. Tsipras and the [leftist] Syriza party survives this. They promised people right along that they could get no problems, go back to the way it was, the EU would fold. The EU didn't fold and I don't think they will fold," Ross said. 
Tsipras actually negotiated a lot of concessions from the European Union and should have stopped and declared victory, he argued, though acknowledged the leader's party would have never approved.
The European Central Bank, which refused to raise emergency funding for Greek banks, wants the people of Greece to understand that if the creditor-imposed program is voted down, "they're not going to get any more money and they're not going to be part of the euro," said the vice chairman of international consultancy Kissinger Associates, adding most Greeks don't want to exit the common currency.






For years we have mocked Venezuela's economy (if not its long-suffering population): it got so bad, we even did a visual summary of selected Venezuela headline posts we wrote over the years. 
Most of these were expected, and in line with the transformation of any normal nation to a socialist utopia. None were more poignant than the images of supermarkets and grocery stores that have been ransacked empty as a result of the collapsing currency, devastated supply chains and soaring inflation (supermarkets which have since imposed fingerprint scanners in what is no longer capital but food controls).
We are sad to announce that what was once a Venezuela trademark has now transitioned to a country that until recently was among the most developed nations in the west: Greece. 
As we noted yesterday, in clear rejection of Tsipras' plea for calm, the Greek population stormed (now empty) ATMs, grocery stores and gas stations as they scrambled to obtain, or convert, paper currency into tangible products.
This morning, the NYT picked up on the realization that for Greece ATM runs were last week's story. Now, it's all about the "Supermarket Sweep"... and hoarding. To wit:
Beside the lines at A.T.M.s, people were also lining up at gas stations and in grocery stories. In the small town of Spata, outside Athens, residents had stripped grocery shelves bare by Saturday night. The local Shell station had run out of regular unleaded and had only premium gasoline to sell. “Doom,” the gas attendant responded, when asked to describe the mood. 

The frenzy at gas stations across the country prompted Greece’s largest refiner to issue a statement assuring that there would be enough supply... 
And this is how Athens is slowly starting to look like Caracas.





Having told the citizens of Greece that the European leaders will not kick them out of Europe because "the cost of throwing them out is too high, enormous," it appears Greek PM Tspiras has another plan to ensure - no matter what the outcome of the forthcoming referendum - that there is no actual Grexit. As The Telegraph reports, Greece has threatened to seek a court injunction against the EU institutions, saying "we are taking advice and will certainly consider an injunction at the European Court of Justice. The EU treaties make no provision for euro exit and we refuse to accept it. Our membership is not negotiable."


Greece has threatened to seek a court injunction against the EU institutions, both to block the country's expulsion from the euro and to halt asphyxiation of the banking system.

“The Greek government will make use of all our legal rights,” said the finance minister, Yanis Varoufakis.

“We are taking advice and will certainly consider an injunction at the European Court of Justice. The EU treaties make no provision for euro exit and we refuse to accept it. Our membership is not negotiable,“ he told the Telegraph.

The defiant stand came as Europe’s major powers warned in the bluntest terms that Greece will be forced out of monetary union if voters reject austerity demands in a shock referendum on Sunday.

Any request for an injunction against EU bodies at the European Court would be an unprecedented development, further complicating the crisis.

With JC Juncker lies and propaganda this morning, Tsipras main goal now is to keep anarchy from breaking out before the potential vote on Sunday.






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Greek Banks Get Shut Down For A Week, 'Grexit" Now Probable...And So It Begins



Is this the crisis that precipitates the formation of the "10 Kings"?




And So It Begins - Greek Banks Get Shut Down For A Week And A 'Grexit' Is Now Probable




Is this the beginning of the end for the eurozone?  For years, European officials have been trying to “fix Greece”, but nothing has worked.  Now a worst case scenario is rapidly unfolding, and a “Grexit” has become more likely than not.  

On Sunday, the European Central Bank announced that it was not going to provide any more emergency support for Greek banks.  But that was the only thing keeping them alive.  In order to prevent total chaos, Greek banks have been shut down for at least a week.  

ATMs are still open, but it is being reported that daily withdrawals will be limited to 60 euros.  Of course nobody knows for sure if or when the banks will reopen after this “bank holiday” is over, so needless to say average Greek citizens are pretty freaked out right about now.  In addition, the stock market in Greece is not going to open on Monday either.  This is what a national financial meltdown looks like, and the nightmare that has been unleashed in Greece will soon start spreading to much of the rest of Europe.

This reminds me so much of what happened in Cyprus.  Up until the very last minute, politicians were promising everyone that their money was perfectly safe, and then the hammer was brought down.


The exact same pattern is playing out in Greece.  For example, just check out what one very prominent Greek politician said on television on Saturday…


“Citizens should not be scared, there is no blackmail,” Panos Kammenos, head of the government’s coalition ally, told local television. “The banks won’t shut, the ATMs will (have cash). All this is exaggeration,” he said.

One day later, the banks did get shut down and ATMs all over the country started running out of cash.  The following comes from CNBC…


Despite a tweet from Greek Finance Minister Yanis Varoufakis that his government “opposed the very concept” of any controls, Greek Prime Minister Alexis Tsipras said later Sunday that he had forced the country’s central bank to recommend a bank holiday and capital controls.
The Athens stock exchange will also be closed as the government tries to manage the financial fallout of the disagreement with the European Union and the International Monetary Fund. 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.

So what is the moral of this story?
Never trust politicians – especially when a major financial crisis is looming.
All over Greece, people are taking photos of very long lines at the ATMs that actually do still have some cash.  Here are just a couple of examples…

Of course those that were smart enough to see this coming took their money out of the banks long ago.  And even as late as last week, people were pulling more than a billion euros out of the banks every single day.  Without direct intervention by the European Central Bank, most Greek banks would have totally collapsed by now…

So now that the banks are shut down, what happens next?
Needless to say, economic activity in Greece is going to come to a grinding halt.  In addition, very few foreigners are going to want to travel to Greece or deal with Greece financially until this crisis is resolved somehow…


An extended bank shutdown and tough capital controls will likely wreak further havoc on the Greek economy by scaring away tourists and chilling commercial activity.
And with Greece unable to borrow from financial markets, and apparently unwilling to strike a deal with the only institutions prepared to lend it money, it will find itself sliding rapidly towards exit from the euro.

When the Greek banks finally do reopen, which of them will still be solvent?
Will some of them need “bail-ins”?
Will account holders be forced to take “haircuts” like we saw in Cyprus?
For the moment, what we do know is that the banks will all be shut down until at least July 6th.  Greek Prime Minister Alexis Tsipras has called for a national referendum to be held on July 5th.  The Greek people will get a chance to vote on whether or not the latest creditor proposals should be accepted.  But the funny thing is that Tsipras and the rest of Syriza are already encouraging the Greek people to vote no…

Greece’s parliament has voted in favor of Prime Minister Alexis Tsipras’ motion to hold a referendum on the country’s creditor proposals for reforms in exchange for loans, the Associated Press reported. Tsipras and his coalition government have urged people to vote against the deal, throwing into question the country’s financial future.
The vote is to be held next Sunday, July 5. It has raised the question of whether Greece can remain in Europe’s joint currency, the euro.

So why hold a referendum if you just want everyone to vote no?
It is because Tsipras does not want to solely shoulder the blame for what comes next.  A “no vote” would essentially be a vote to leave the euro and go back to the drachma.  The following comes from the Daily Mail…

If Greece does default and ends up leaving the euro, the short-term economic consequences for Greece will be catastrophic.
But the rest of Europe will feel a tremendous amount of pain as well.  In fact, we are already getting a sneak peek at coming attractions.  As we approach Monday morning in Europe, Asian stocks are crashing big time, and European futures are absolutely cratering.  It should be very interesting to see how Monday plays out.
In addition, the euro is already way down in early trading.  If Greece does ultimately leave the euro, the value of the euro is going to plunge like a rock.  As I have warned repeatedly, the euro is heading for parity with the U.S. dollar, and at some point it will drop below parity.
And once Greece is out, everyone is going to be speculating who the “next Greece” will be.  Expect bond yields for Italy, Spain, Portugal and France to go skyrocketing.
Just a couple of days ago, I issued a red alert... We are entering a period of time when the global financial system is beginning to unravel.  Most people still have a tremendous amount of faith in the system and assume that those running it are fully capable of keeping it from collapsing.  In fact, many have accused me of being crazy for suggesting that the global financial system is in imminent danger of imploding.
A very wise man once said that “pride goeth before destruction”.  Our arrogance and our blind faith in the fundamentally flawed systems that we have established will contribute greatly to our undoing.
Events are starting to accelerate greatly now, and it is just a matter of time before we see who was right and who was wrong.







European bank stocks and borrowing costs for Italy, Spain and Portugal bore the brunt on Monday of financial markets' fright at the growing risk that Greece will leave the euro. 
The worst fall in shares for six months and a 30 basis point rise in bond yields for other southern euro zone states was the start of an acid test of policymakers' hopes that, if Greece does go, the rest of Europe is isolated from the fallout.
After an initial wave of selling, however, most markets recovered ground. The one-day moves were large but looked pale in comparison to the events of 2008 or the last major round of Greek-spurred turmoil in 2011-12. 
Wall Street was set to open around 1 percent lower while the FTSE Eurofirst blue chip index was down by just over 2 percent overall. 
"The European financial system now has much less exposure to Greece than in 2011 and 2012," said Stephanie Flanders, Chief Market Strategist for Europe at JP Morgan Asset Management.

It is also better equipped to deal with contagion to other countries -- and so are the countries themselves." 
Greece's banks and stock market were closed on Monday and were expected to remain so until after the July 5 snap referendum called by Greek Prime Minister Alexis Tsipras on further austerity demanded by euro zone partners.

The euro zone's banking index .SX7E fell 5.5 percent, with the worst falls for Portuguese, Spanish and Italian lenders.


Adding to the gloomy backdrop, China shares dived another 3 percent, bringing the losses in the past two weeks to 25 percent, with the Chinese central bank's measures on Saturday to support the economy failing to calm jittery investors.













Shock vote on terms of bailout pushes Greek banks to the brink of meltdown as long queues form at country's cashpoints 

  • Eurozone finance ministers have refused a Greek request to extend its bailout programme
  • The current programme expires on June 30, and will not be continued
  • Finance ministers are continuing emergency meetings in Brussels without Greece to decide the consequences
  • Hundreds rushed to ATMs across the country, after Prime Minister Alexis Tsipras called for a referendum on the bailout at 1am Greek time 

Greek banks were on the brink of meltdown last night after the shock announcement that its crisis-hit government would hold a referendum on the terms of a fresh international bailout.
Long queues formed outside the country’s cashpoints after prime minister Alexis Tsipras accused the International Monetary Fund and eurozone of trying to blackmail his country – and pledged to give the Greek people the final say in a vote next weekend.
Mr Tsipras described the bailout plan as ‘humiliation’, condemned ‘unbearable’ austerity measures demanded by creditors and said he would campaign for a ‘no’ result.


Last night, finance ministers in Brussels raised the stakes further by refusing to extend its bailout to allow Greece to meet a £1.2 billion payment due to the IMF on Tuesday – setting the country on a path to default.
Jeroen Dijsselbloem, Dutch president of the eurogroup of finance ministers, warned even a ‘yes’ vote in a Greek refer-endum might not be enough to get a deal, if the government did not fully support the plan.


‘If it is a “yes”, in the meantime there are major problems for Greece. If it is a “yes”, the question is: who are we trusting, who are we working with to then implement the program?’
With fears growing that the country’s banks could grind to a halt this week, the Greek authorities are expected to consider imposing capital controls as early as tomorrow morning.
Thousands of British tourists would be among those affected by the measures, which include restricting cash withdrawals and curbing electronic transfers from the Greek system.
The Association of British Travel Agents and Foreign Office advise taking various methods of payment if travelling to Greece, including cash.











With the eyes of the world on Greece and a possible collapse of the Eurozone as a likely end result, many are ignoring a potentially much more massive elephant in the room. It's been the hottest market in the world, so flush with cash that they have actually built entire ghost-cities lacking populations and mega shopping centers without tenants – a clear sign of bubble waiting to be pricked. But the inevitable seems to now be taking hold as once unstoppable Chinese stock markets are now reversing the unprecedented gains seen over the last several years.

Forget Greece. We've seen that story before. This could be the first domino:
The Chinese market is in an all-on crash.
Last night the Shanghai index was down 8%, and while there have been some wild recovery rallies during the last couple of weeks as well the cumulative loss is close to 20% at this point, the formal "declaration" of a bear market.

 That market had been in a parabolic blow-off since roughly December, a classic (to a chartist) three-stage parabolic move with two retracements.  The most-recent move down, however, threatens to violate the uptrend support originated back in November and has already erased the gains since May.

  Yes, a 2-month round-trip of about 20%.

What happens is exactly what's happening in Greece and China, and what will undoubtedly soon come to pass in the United States.
The actions of the world's wealthy should be followed closely, and as we've noted previously, they are being told to make sure they have physical assets like cash, gold, and silver on hand in anticipation of a serious destabilizing event. The reset is coming, and as was recently noted by Brandon Smith of Alt Market, the next stage of the elites' plan for total global economic centralization is about to be in full effect.
With China's stock markets now imploding on a scale that can only be described as a crash, it is only a matter of time before the chain reaction of derivative-based defaults leads to similar detonations across the entire wor

 What comes next is anyone's guess, but it won't be pretty. One possible outcome, as suggested by analyst Greg Mannarino, is pretty much the worst imaginable scenario and one we have urged our readers to prepare for:
It will be, for all intents and purposes, every man for himself. The elite know this and that is likely why they are buying aircraft landing strips, rural hideaways, and divesting themselves of paper assets.
If we are, in fact, on the cusp of this next great paradigm shift, it will be littered with panic, widespread civil unrest and shortages of essential good necessary for survival. It is a scenario for which the government has prepared for over a decade, but as former DHS head Janet Napolitano has warned, such an emergency will leave the government overwhelmed and unable to assist those in need.


Central Banks Scramble To Stabilize Crashing Markets: China Fails, Switzerland Succeeds (For Now) | Zero Hedge

Following a week in which the Chinese stock bubble popped and a weekend in which the Eurozone bubble followed, it was all up to central banks to stabilize the devstation that would follow should the Plunge Protection Team, now global, not show up. 
And while US equities futures were looking grim overnight, China at least started off on the right foot, rising a little over 2% in early trading following China's scramble to stabilize markets as it knows the alternative could very well be (deadly) civil unrest.  And then something unexpected happened: the market did not follow the Chinese central bank script. In fact, as noted earlier, stocks plunged tumbling as much as limit down for CSI-300 futs, and the SHCOMP crashing the most since 1996.

This was not supposed to happen: in fact, with China unleashing the bazooka of the double rate cuts, it was virtually assured that at least China's stock would rise as the rest of the world tumbled on Greek worries. That it did not was the biggest red flag, far more so than what the Greek referendum reveals this weekend, as it means that after Sweden last week, now China has lost control!


As the SNB president admitted: “There was an increased demand for francs” over night, Thomas Jordan says at conference in Bern. “The SNB intervened in the market to stabilize it.”
In other words, without the SNB, the situation would have been truly dire.
And this is only on Monday night: we now have 5 more days of agonizing wait until we get to the Greek rerferendum, which may not even happen because as German FAZ reports Greece may not even have the funds to hold the Greferendum!

To be sure before the week is done every single other central bank will have a go at stabilizing the "market" although if everyone else decides to sell, the Chinese contagion will spread as central bank after central bank loses market intervention credibility. At that point, it will be time to really get the hell out of Dodge.





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Sunday, June 28, 2015

Anne Graham Lotz: Blowing The Trumpet




Below is an excellent video presentation by Anne Graham Lotz as she discusses Matthew 24 and the parallels to today's world:



Anne Graham Lotz: 
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Greeks Storm ATMs, Stores, Gas Stations, Capital Controls Begin: Banks Will Not Open Monday





Ignoring Tsipras Plea For Calm, Greeks Storm ATMs, Stores, Gas Stations | Zero Hedge



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.
Earlier:
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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