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Greece On Brink Of Default, Athens Low On Cash, May Drop Out Of Eurozone

Greece and its creditors remain locked in brinkmanship, with one EU commissioner saying Athens had been only “centimeters away” from a deal to avoid default and euro exit. Greek bank dispensers are low on cash.

EU economic affairs commissioner Pierre Moscovici told French radio Monday that Greece’s leftist government had been only “centimeters” away from reaching a deal when talks with its international lenders broke down over the weekend.

There was still “room for negotiation,” Moscovici said, adding that European Commission President Jean-Claude Juncker would “indicate the route to follow” at a press conference in Brussels at around midday on Monday.

“We must continue to talk,” Moscovici said, echoing a remark from French Finance Minister Michel Sapin that talks “could re-start at any moment.”

German Finance Minister Wolfgang Schäuble had openly questioned Greek bank solvency over the weekend, after Athen’s decision to test its negotiating stance in a referendum among Greeks next Sunday.

That was followed by a European Central Bank (ECB) decision to freeze extra cash for Athens.

Schäuble said the liquidity of “some Greek banks could be in doubt.”

Tuesday deadline

Greece and its creditors face a Tuesday deadline for Athens to repay 1.6 billion euros ($1.76 billion) tranche or default, thereby raising the prospect of a Greek euro zone exit.

On Sunday, Greek Prime Minister Alexis Tsipras urged Greeks via television to keep calm after his government imposed capital controls and said it would keep banks closed until next Sunday’sreferendum.

Greeks were told their cash withdrawals from automatic teller machines (ATMs) or bank dispensers were capped daily at 60 euros.

Tourists nervous

Anxious tourists, a mainstay of Greece’s economy, were told the ATM withdrawal limit did not apply to people using foreign credit and debit cards.

However, a banking source quoted by the news agency AFP earlyMonday said only 40 percent of cash machines now had money in them.

Canadian tourist Cassandra Preston told Reuters that she had scoured Athens for a machine with cash.

“I am here for another month, and I would like to make sure I have some cash on me,” she said.

An Athens resident, who gave her name only as Anna, told AFP she had searched in vain for a working cash machine.

“There is no more money,” she said, adding that she hoped for a referendum outcome so that Greece would stay in the eurozone and that the “nightmare will finally end.”

Since Friday night alone, 1.3 billion euros ($1.45 billion) had been withdrawn from the Greek banking system, according to the head of the bank workers’ union Stavros Koukos.

More emergency talks

Greek Finance Minister Yanis Varoufakis told the German daily Bild that Athens remained “open to new proposals by the (creditor) institutions.”

In Berlin, German Chancellor Angela Merkel called an emergency meeting with the heads of parliamentary groups and party leaders for Monday.

In Paris, French President Francois Hollande will chair crisis talks with key ministers.

French Prime Minister Manuel Valls warned of a “real risk” of Greece leaving the eurozone if Greeks vote against the EU’s bailout proposals in the planned referendum.

Top Japanese government spokesman, Yoshihide Suga said G7 finance ministers had held consultations over the weekend. He described the breakdown between Greece and its lenders over the weekend as “extremely regrettable.”

Controls ‘justified’

The EU commission’s top official for monitoring financial stability in the 28-nation bloc, Jonathan Hill, said Greece’s decision to impose capital controls was “prima facie, justified.”

“The stability of the financial and banking system in Greece constitutes a matter of overriding public interest,” said Hill.

Free movement of capital should, however, be restored as quickly as possible, he added.

Exit fears in Berlin

Reuters, in an analytical article, said Merkel – unlike her finance minister Schäuble – was “determined to avoid” a Greek exit from the 19-nation eurozone, because of its potentially severe consequences, including a humanitarian crisis on Europe’s southern rim.

It quoted Merkel’s “closest advisers” as saying her biggest fear was that Germany would be blamed for “blowing up Europe” for the third time in a century.”

OPINION

Greece: A week with no banks

Greece is on the edge of the economic abyss. As capital controls are rolled out, the country’s banks will remain closed for at least a week. DW’s Jannis Papadimitriou reports from Athens.

Although the finer details remain unknown, money transfers are currently restricted to European countries, and even domestically, companies are only allowed to withdraw larger amounts of cash with prior approval. According to a number of concurring Greek media reports, however, Greek ATMs will reopen from Tuesday, but with withdrawals capped to a daily limit of 60 euros ($66). On the same day, Greece’s current bailout package is due to expire, with fresh billions for a rescue nowhere in sight.

Last month alone, Greeks withdrew more than 3.5 million euros from their bank accounts. Throughout June, the trend has relentlessly continued.

“In the end, capital restrictions were unavoidable,” said Michael Glezakos, Professor of fiscal policy at the University of Piraeus, in an interview with the Greek television channel Skai.

Economists have warned that if banks remained open, deposits would soon be gone. Meanwhile, the European Central Bank (ECB) has decided to no longer extend emergency credit for Greek banks via Emergency Liquidity Assistance (ELA).

The pot of 90 billion euros previously granted to Greece is almost empty. But, the fact that Frankfurt central bankers are still standing by ELA support for Greek financial institutions is something Professor Glezakos sees as a positive sign.

“The announcement of a referendum on the reform policy in Greece could be understood by ECB chief Mario Draghi as the end of the current rescue programme and then he would be entitled to just pull the plug on Greek banks,” says the economist.

Threatening scenario ahead of referendum

After the bank closure, there was initially no panic in Hellas. But still more and more people flocked to the ATMs in the hope of withdrawing large sums of money before the introduction of capital controls. In the early hours of Monday, there were even long queues in front of gas stations. In a bid to prevent disputes or theft, Greek police have stepped up patrols, with some officers even being brought back from holiday.

Athens’ left-wing politicians are now blaming the EU’s leading players and various media outlets, both home and abroad, for creating a panic campaign which aims to intimidate the Greeks.

“Who lured all these people to the gas stations?” asked left-wing MP Jorgos Varemenos in a TV interview. He answered the question himself: “This is a shock-and-awe-operation to force the Greek people to their knees.”

A conspiracy against the Greek government?

For conservative opposition leader and former Economy Minister, Kostis Hatzidakis, the truth is very different: “We have a government which presents the prospect of cuts amounting to 8 billion euros, while there was still talk during the election campaign of multibillion-dollar bounties,” Hatzidakis told Greek TV station Skai.

Currency conversion ‘not an issue’

The closure of banks in Greece now begs the question more than ever, whether a vote will be cast on Sunday over the creditors’ newest reform proposals or a Greek exit from the euro. The nearer the referendum comes, the stronger the polarization and the more the “us-against-them feeling” grows.

Already on Sunday, sympathizers of Greece’s leftist party were demonstrating in front of parliament, as well as the EU office in Greece. On Monday, the protest movement was due to meet again in Athens’ city center to demonstrate “against the creditors’ ultimatum.” A day later, the opposition movement will march in support of the EU.

For Nikos Filis, spokesperson for Greece’s governing left party, a return to the drachma isn’t on the cards.

“Apart from Mr Schäuble, I don’t see anyone at the minute that’s suggesting an exit from the euro,” Filis said in a TV interview.

Political journalist Jannis Pretenderis sees things quite differently, however.

“No one seriously believes that we’ll vote on Sunday whether the tax amounts to 13 percent or more. In principle, we’ll decide in a referendum, which currency our banks will reopen with,” the analyst told TV broadcaster, Mega.

Greek financial crisis prompts euro slide in Asia trading

The euro fell against the US dollar in early Asian trading after Athens announced a referendum on its bailout talks for next Sunday. The due date for a 1.6-billion-euro payment to the IMF is just a day away.

The 19-nation euro fell as much as 1.9 percent to $1.0955, its lowest level in almost a month, in early trade in Tokyo on Monday. Against the yen, the common currency dropped more than 3 percent to 133.80 yen, a five-week low. The Swiss franc added 1 percent versus the euro, while the UK pound rose 1.1 percent.

Financial analysts reacted to the Greek government’s decision to call a referendum on July 5 on its bailout deal as an escalation in the country’s financial crisis.

The European Central Bank froze the level of emergency aid available to Greek banks on Sunday.

The announcement of bank closures in Greece for Monday and a limit of 60 euros ($66) for withdrawals from ATM cash machines when they reopen was made on Sunday. It increased concerns of a default and risk that Greece would leave the eurozone.

Greece’s finance ministry announced that the strict withdrawal limits would not apply to holders of credit or debit cards issued in foreign countries. The announcement came after tourists were seen joining locals in front of ATMs on Sunday.

The Athens stock exchange will also be closed on Monday.

Greek officials said the bank holiday would last for several days and would be accompanied by limits on bank transfers abroad and withdrawals from cash machines.

Greece is due to pay the International Monetary Fund 1.6 billion euros ($1.8 billion) on Tuesday.

Finance Minister Yanis Varoufakis said on Sunday that the chaos was due to mis-management from eurozone officials: “Greece owes money to one part of the troika and we are owed money from another part. They will have themselves to blame if the IMF can’t be paid.”

Trader reaction

A senior currency strategist at ANZ Bank New Zealand told Bloomberg News: “The knee-jerk reaction is for flight out of the euro and into safety. Defaulting to the IMF tomorrow looks like a certainty and when that happens there is no proposal, there is no legal mandate for Europe to bail out Greece. There are a whole bunch of unknown unknowns.”

German banks on Sunday said they were fortified against possible financial turmoil in Greece.

Germany’s biggest lender Deutsche Bank issued a statement on Sunday: “Deutsche Bank has sufficient safety mechanisms in place to safeguard its business activities as well as those of its clients.”

A spokesman for Germany’s second biggest lender, Commerzbank, commented in a similar vein: “We are very well-prepared because we’ve been anticipating a situation like this for a long time.”

DW.DE

Cudjoe Kpor

5:46 AM (7 hours ago)
to Akinbode, Olatunji, Cc:, Habeeb

———- Forwarded message ———-
From: Cudjoe Kpor <cudjoekpor@gmail.com>
Date: Mon, Jun 29, 2015 at 10:45 AM
Subject: Greece On Brink Of Default, Athens Low On Cash, May Drop Out Of Eurozone
To:

Greece On Brink Of Default, Athens Low On Cash, May Drop Out Of Eurozone, Chaos Looms

Greece and its creditors remain locked in brinkmanship, with one EU commissioner saying Athens had been only “centimeters away” from a deal to avoid default and euro exit. Greek bank dispensers are low on cash.

EU economic affairs commissioner Pierre Moscovici told French radio Monday that Greece’s leftist government had been only “centimeters” away from reaching a deal when talks with its international lenders broke down over the weekend.

There was still “room for negotiation,” Moscovici said, adding that European Commission President Jean-Claude Juncker would “indicate the route to follow” at a press conference in Brussels at around midday on Monday.

“We must continue to talk,” Moscovici said, echoing a remark from French Finance Minister Michel Sapin that talks “could re-start at any moment.”

German Finance Minister Wolfgang Schäuble had openly questioned Greek bank solvency over the weekend, after Athen’s decision to test its negotiating stance in a referendum among Greeks next Sunday.

That was followed by a European Central Bank (ECB) decision to freeze extra cash for Athens.

Schäuble said the liquidity of “some Greek banks could be in doubt.”

Tuesday deadline

Greece and its creditors face a Tuesday deadline for Athens to repay 1.6 billion euros ($1.76 billion) tranche or default, thereby raising the prospect of a Greek euro zone exit.

On Sunday, Greek Prime Minister Alexis Tsipras urged Greeks via television to keep calm after his government imposed capital controls and said it would keep banks closed until next Sunday’sreferendum.

Greeks were told their cash withdrawals from automatic teller machines (ATMs) or bank dispensers were capped daily at 60 euros.

Tourists nervous

Anxious tourists, a mainstay of Greece’s economy, were told the ATM withdrawal limit did not apply to people using foreign credit and debit cards.

However, a banking source quoted by the news agency AFP earlyMonday said only 40 percent of cash machines now had money in them.

Canadian tourist Cassandra Preston told Reuters that she had scoured Athens for a machine with cash.

“I am here for another month, and I would like to make sure I have some cash on me,” she said.

An Athens resident, who gave her name only as Anna, told AFP she had searched in vain for a working cash machine.

“There is no more money,” she said, adding that she hoped for a referendum outcome so that Greece would stay in the eurozone and that the “nightmare will finally end.”

Since Friday night alone, 1.3 billion euros ($1.45 billion) had been withdrawn from the Greek banking system, according to the head of the bank workers’ union Stavros Koukos.

More emergency talks

Greek Finance Minister Yanis Varoufakis told the German daily Bild that Athens remained “open to new proposals by the (creditor) institutions.”

In Berlin, German Chancellor Angela Merkel called an emergency meeting with the heads of parliamentary groups and party leaders for Monday.

In Paris, French President Francois Hollande will chair crisis talks with key ministers.

French Prime Minister Manuel Valls warned of a “real risk” of Greece leaving the eurozone if Greeks vote against the EU’s bailout proposals in the planned referendum.

Top Japanese government spokesman, Yoshihide Suga said G7 finance ministers had held consultations over the weekend. He described the breakdown between Greece and its lenders over the weekend as “extremely regrettable.”

Controls ‘justified’

The EU commission’s top official for monitoring financial stability in the 28-nation bloc, Jonathan Hill, said Greece’s decision to impose capital controls was “prima facie, justified.”

“The stability of the financial and banking system in Greece constitutes a matter of overriding public interest,” said Hill.

Free movement of capital should, however, be restored as quickly as possible, he added.

Exit fears in Berlin

Reuters, in an analytical article, said Merkel – unlike her finance minister Schäuble – was “determined to avoid” a Greek exit from the 19-nation eurozone, because of its potentially severe consequences, including a humanitarian crisis on Europe’s southern rim.

It quoted Merkel’s “closest advisers” as saying her biggest fear was that Germany would be blamed for “blowing up Europe” for the third time in a century.”

OPINION

Greece: A week with no banks

Greece is on the edge of the economic abyss. As capital controls are rolled out, the country’s banks will remain closed for at least a week. DW’s Jannis Papadimitriou reports from Athens.

Although the finer details remain unknown, money transfers are currently restricted to European countries, and even domestically, companies are only allowed to withdraw larger amounts of cash with prior approval. According to a number of concurring Greek media reports, however, Greek ATMs will reopen from Tuesday, but with withdrawals capped to a daily limit of 60 euros ($66). On the same day, Greece’s current bailout package is due to expire, with fresh billions for a rescue nowhere in sight.

Last month alone, Greeks withdrew more than 3.5 million euros from their bank accounts. Throughout June, the trend has relentlessly continued.

“In the end, capital restrictions were unavoidable,” said Michael Glezakos, Professor of fiscal policy at the University of Piraeus, in an interview with the Greek television channel Skai.

Economists have warned that if banks remained open, deposits would soon be gone. Meanwhile, the European Central Bank (ECB) has decided to no longer extend emergency credit for Greek banks via Emergency Liquidity Assistance (ELA).

The pot of 90 billion euros previously granted to Greece is almost empty. But, the fact that Frankfurt central bankers are still standing by ELA support for Greek financial institutions is something Professor Glezakos sees as a positive sign.

“The announcement of a referendum on the reform policy in Greece could be understood by ECB chief Mario Draghi as the end of the current rescue programme and then he would be entitled to just pull the plug on Greek banks,” says the economist.

Threatening scenario ahead of referendum

After the bank closure, there was initially no panic in Hellas. But still more and more people flocked to the ATMs in the hope of withdrawing large sums of money before the introduction of capital controls. In the early hours of Monday, there were even long queues in front of gas stations. In a bid to prevent disputes or theft, Greek police have stepped up patrols, with some officers even being brought back from holiday.

Athens’ left-wing politicians are now blaming the EU’s leading players and various media outlets, both home and abroad, for creating a panic campaign which aims to intimidate the Greeks.

“Who lured all these people to the gas stations?” asked left-wing MP Jorgos Varemenos in a TV interview. He answered the question himself: “This is a shock-and-awe-operation to force the Greek people to their knees.”

A conspiracy against the Greek government?

For conservative opposition leader and former Economy Minister, Kostis Hatzidakis, the truth is very different: “We have a government which presents the prospect of cuts amounting to 8 billion euros, while there was still talk during the election campaign of multibillion-dollar bounties,” Hatzidakis told Greek TV station Skai.

Currency conversion ‘not an issue’

The closure of banks in Greece now begs the question more than ever, whether a vote will be cast on Sunday over the creditors’ newest reform proposals or a Greek exit from the euro. The nearer the referendum comes, the stronger the polarization and the more the “us-against-them feeling” grows.

Already on Sunday, sympathizers of Greece’s leftist party were demonstrating in front of parliament, as well as the EU office in Greece. On Monday, the protest movement was due to meet again in Athens’ city center to demonstrate “against the creditors’ ultimatum.” A day later, the opposition movement will march in support of the EU.

For Nikos Filis, spokesperson for Greece’s governing left party, a return to the drachma isn’t on the cards.

“Apart from Mr Schäuble, I don’t see anyone at the minute that’s suggesting an exit from the euro,” Filis said in a TV interview.

Political journalist Jannis Pretenderis sees things quite differently, however.

“No one seriously believes that we’ll vote on Sunday whether the tax amounts to 13 percent or more. In principle, we’ll decide in a referendum, which currency our banks will reopen with,” the analyst told TV broadcaster, Mega.

Greek financial crisis prompts euro slide in Asia trading

The euro fell against the US dollar in early Asian trading after Athens announced a referendum on its bailout talks for next Sunday. The due date for a 1.6-billion-euro payment to the IMF is just a day away.

The 19-nation euro fell as much as 1.9 percent to $1.0955, its lowest level in almost a month, in early trade in Tokyo on Monday. Against the yen, the common currency dropped more than 3 percent to 133.80 yen, a five-week low. The Swiss franc added 1 percent versus the euro, while the UK pound rose 1.1 percent.

Financial analysts reacted to the Greek government’s decision to call a referendum on July 5 on its bailout deal as an escalation in the country’s financial crisis.

The European Central Bank froze the level of emergency aid available to Greek banks on Sunday.

The announcement of bank closures in Greece for Monday and a limit of 60 euros ($66) for withdrawals from ATM cash machines when they reopen was made on Sunday. It increased concerns of a default and risk that Greece would leave the eurozone.

Greece’s finance ministry announced that the strict withdrawal limits would not apply to holders of credit or debit cards issued in foreign countries. The announcement came after tourists were seen joining locals in front of ATMs on Sunday.

The Athens stock exchange will also be closed on Monday.

Greek officials said the bank holiday would last for several days and would be accompanied by limits on bank transfers abroad and withdrawals from cash machines.

Greece is due to pay the International Monetary Fund 1.6 billion euros ($1.8 billion) on Tuesday.

Finance Minister Yanis Varoufakis said on Sunday that the chaos was due to mis-management from eurozone officials: “Greece owes money to one part of the troika and we are owed money from another part. They will have themselves to blame if the IMF can’t be paid.”

Trader reaction

A senior currency strategist at ANZ Bank New Zealand told Bloomberg News: “The knee-jerk reaction is for flight out of the euro and into safety. Defaulting to the IMF tomorrow looks like a certainty and when that happens there is no proposal, there is no legal mandate for Europe to bail out Greece. There are a whole bunch of unknown unknowns.”

German banks on Sunday said they were fortified against possible financial turmoil in Greece.

Germany’s biggest lender Deutsche Bank issued a statement on Sunday: “Deutsche Bank has sufficient safety mechanisms in place to safeguard its business activities as well as those of its clients.”

A spokesman for Germany’s second biggest lender, Commerzbank, commented in a similar vein: “We are very well-prepared because we’ve been anticipating a situation like this for a long time.”

DW.DE

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