Greeks will find banks open, but restrictions still in place

[webfact]

Greeks will find banks open, but restrictions still in place
DEMETRIS NELLAS, Associated Press

ATHENS, Greece (AP) — Greeks will finally see their banks reopen at 8 a.m. local (0500 GMT) Monday morning, but many restrictions on transactions, including cash withdrawals, will remain.

Also, many goods and services will become more expensive as a result of a rise in Value Added Tax approved by Parliament last Thursday, among the first batch of austerity measures demanded by Greece's creditors.

The parliament also agreed to deep reforms in the pension system including a gradual phasing out of all early retirement options.

In a decree published Saturday, the Greek government kept the daily cash withdrawal limit at 60 euros ($65) but added a weekly limit. For example, a depositor who doesn't withdraw cash on Monday can withdraw 120 euros ($130) on Tuesday, and so on, up to 420 euros ($455) a week.

Bank customers will still not be able to cash checks, only deposit them into their accounts, and will not be able to get cash abroad with their credit or cash cards, only make purchases. There are also restrictions on opening new accounts or activating dormant ones.

The decree also pushes back by a month, to August 26, the deadline for filing income tax returns.

The decree came on the same day as Greece's coalition government swore in its new, reshuffled cabinet. Five prominent dissidents from the radical left Syriza party, the senior coalition party, were replaced. Four of them had voted against the agreement with Greece's creditors Thursday and the fifth had resigned before the vote.

The most urgent business for the reshuffled government is to pass another batch of austerity measures by Wednesday or early Thursday.

Among the goods that Greeks will find more expensive Monday morning are some meats, coffee, tea, cooking oils other than olive oil, cocoa, vinegar, salt, flowers, firewood, fertilizer, insecticides, sanitary towels and condoms. All these will see the VAT rise from 13% to 23%.

Services whose VAT also goes up from 13% to 23% include restaurants and cafes, funeral parlors, taxis, cramming and tutorial schools — very popular with Greek students who want to make up for the deficiencies of the school system — language institutes and computer learning centers. Public transport fares are expected to rise early next month.

Greece closed its banks beginning June 29 to prevent a bank run after the European Central Bank did not increase emergency funding as Greece's second bailout expired. After the Greek Parliament passed an agreement Thursday to seek a third bailout, the ECB raised its emergency funding to the cash-strapped Greek banks.

Also, on Friday, the European Union decided to release a short-term loan of 7.16 billion ($7.75 billion) to help Greece pay back a loan due Monday to the ECB plus arrears owed to the International Monetary Fund.

-- (c) Associated Press 2015-07-20

[Credo]

They are sort of like a naughty kid whose had their allowance cut.

[micmichd]

In other words, Greeks are allowed to work for the banks, but only allowed to take small portions of their money from the banks. They cannot leave the country becaus they are not allowed to use ATMs abroad.

Welcome back to EU, it's getting like a prison. You may leave, but your assets remain in the bank.

Well done Mr Schaeuble, your Grexit threats caused a bank run.

Edited July 20, 2015 by micmichd

[cookee68]

It's a start

[hawker9000]

It's a start

There'll be lots of carping & whining (and the usual lame indictments of Germany here on TV), but this does indeed look like a credible first step by a country in dire need of treatment for its addictions. Some will continue to insist the cure is worse than the disease. But let's hope it doesn't get derailed. Let's also hope some others in the EU are getting the message ... And the U.S., too, for that matter.

[SheungWan]

In other words, Greeks are allowed to work for the banks, but only allowed to take small portions of their money from the banks. They cannot leave the country becaus they are not allowed to use ATMs abroad.

Welcome back to EU, it's getting like a prison. You may leave, but your assets remain in the bank.

Well done Mr Schaeuble, your Grexit threats caused a bank run.

No, you got that wrong. The Greek government created the situation whereby the banks were restricted to issuing limited amounts of money ie the threat of a bank run. They did this by their stupid attempts of brinkmanship and refusing to implement an agreement except under their own free lunch terms. Now that the Greek population realise that the next time the Greek government wants to pull that stunt, bank closure leading to devalued New Drachmas is their future, there may be pause for reflection (don't be too optimistic on that front). Tsipras certainly has paused even if Varoufakis and the others want to drive right over the cliff as they seemingly have no reverse gear. Schauble has correctly given notice that next time Greece is likely to be turfed out. In practice, the ECB is assisting right now the Greek banks normalise the situation, but there are plenty in Europe that would cut them loose. The other point is re bank depositors. It is not their money just sitting there waiting to be withdrawn. if you are a bank depositor you are a creditor. Sometimes the ATM may shut. In normal times there shouldn't be a problem. Message? Be careful who you elect. It is not a free lunch.

Edited July 21, 2015 by SheungWan