Sunday 26 March 2017

Angela Merkel says Greece must act fast as banks prepare to reopen

* Greek banks to reopen but restrictions to stay
* Bankers expect long queues but no big problems
* Some VAT rises to take effect

German Chancellor Angela Merkel
German Chancellor Angela Merkel

Costas Pitas and Lefteris Papadimas

Greece will reopen its banks on Monday for the first time in three weeks, but with restrictions on withdrawals still in place, German Chancellor Angela Merkel said the government would have to move fast on any new bailout terms.

The cautious reopening of the banks, and an increase in value added tax on restaurant food and public transport from Monday, are aimed at restoring trust inside and outside Greece after an aid-for-reforms deal last week averted bankruptcy.

Greek Prime Minister Alexis Tsipras looks on during a swearing in ceremony of members of his government at the Presidential Palace in Athens, Greece July 18, 2015. New ministers in Greek Prime Minister Tsipras' government were sworn in on Saturday after a reshuffle expelled dissidents from his cabinet and began a new phase of negotiations for a third bailout package. REUTERS/Alkis Konstantinidis
Greek Prime Minister Alexis Tsipras looks on during a swearing in ceremony of members of his government at the Presidential Palace in Athens, Greece July 18, 2015. New ministers in Greek Prime Minister Tsipras' government were sworn in on Saturday after a reshuffle expelled dissidents from his cabinet and began a new phase of negotiations for a third bailout package. REUTERS/Alkis Konstantinidis

Greeks will be able to withdraw €420 a week at once instead of just €60 a day but capital controls will remain.

"That's not a normal life so we have to negotiate quickly," Merkel said in extracts from an interview with German public broadcaster ARD.

Read more here: Greek banks ready to open Monday - long queues expected  

Greek Prime Minister Alexis Tsipras is trying to turn a corner after he reluctantly agreed to negotiate a third bailout, allowing the European Central Bank to top up emergency credit lines but prompting a rebellion in his leftist Syriza party.

A man withdraws money at an Alpha Bank branch ATM in central Athens, Greece, July 19, 2015. The Greek government ordered banks to open on Monday, three weeks after they were shut down to prevent the system collapsing under a flood of withdrawals, as Prime Minister Alexis Tsipras looked to the start of new bailout talks next week. REUTERS/Yiannis Kourtoglou
A man withdraws money at an Alpha Bank branch ATM in central Athens, Greece, July 19, 2015. The Greek government ordered banks to open on Monday, three weeks after they were shut down to prevent the system collapsing under a flood of withdrawals, as Prime Minister Alexis Tsipras looked to the start of new bailout talks next week. REUTERS/Yiannis Kourtoglou
A man cleans the pavement in front a closed Attica Bank branch in Athens, Greece, July 19, 2015.The Greek government ordered banks to open on Monday, three weeks after they were shut down to prevent the system collapsing under a flood of withdrawals, as Prime Minister Alexis Tsipras looked to the start of new bailout talks next week.The graffiti reads, " A 'No' of the classes" and "No to the debt" REUTERS/Yiannis Kourtoglou

Read more here: Drama was not about the fall of Greece, but of 'Europe'

The head of Greece's banking association Louka Katseli urged Greeks to do the opposite of what they have done for months and put cash back on their bank accounts rather than withdraw more.

"Tomorrow when the banks reopen and normality is restored, let's all help our economy. If we take our money out of chests and from our homes - where they are not safe in any case - and we deposit them in the banks, we will strengthen the liquidity of the economy," she told Skai television on Sunday.

Read more here: Drama was not about the fall of Greece, but of 'Europe'  

'Syriza undertook to tackle such endemic corruption and reform the system of public administration in Greece, but so far has been remarkably slow to do so'
'Syriza undertook to tackle such endemic corruption and reform the system of public administration in Greece, but so far has been remarkably slow to do so'

Merkel said it would be possible to talk about changing the maturities of Greece's debt or reducing the interest Athens has to pay after the first successful review of the new bailout package to be negotiated.

Berlin, the biggest contributor to eurozone bailouts, would do all it could to bring talks to a successful conclusion but would "negotiate hard" to ensure Athens stuck to agreements, she said.

"That certainly won't be easy because there are things that we have discussed with all of the Greek governments since 2010 that have never been done but that have been done in other countries like Portugal and Ireland," she said.

ELECTIONS

A street performer (R) acting as a statue stands at the Constitution (Syntagma) square near the Parliament building in Athens, Greece July 18, 2015. The Greek government ordered banks to open on Monday, three weeks after they were shut down to prevent the system collapsing under a flood of withdrawals, as Prime Minister Alexis Tsipras looked to the start of new bailout talks next week. REUTERS/Ronen Zvulun
A street performer (R) acting as a statue stands at the Constitution (Syntagma) square near the Parliament building in Athens, Greece July 18, 2015. The Greek government ordered banks to open on Monday, three weeks after they were shut down to prevent the system collapsing under a flood of withdrawals, as Prime Minister Alexis Tsipras looked to the start of new bailout talks next week. REUTERS/Ronen Zvulun

Acceptance of the bailout terms that meant the banks could reopen marked a turnaround for Tsipras after months of difficult talks and a referendum that rejected a less stringent deal proposed by the lenders.

Read more here: German government dismiss speculation finance minister Wolfgang Schaeuble to resign  

He sacked party rebels in a government reshuffle on Friday and is seeking a swift start to talks on the bailout accord with European partners and the IMF before elections which Interior Minister Nikos Voutsis said were likely in September or October.

But while opinion polls suggest the prime minister's popularity remains high, on the streets of Athens some were sceptical that the bank reopening would change much in a recession-hit country with over 25 percent unemployment rate.

"The banks opening tomorrow won't change anything for me," said 31-year old hotel worker Joanna Arvanitaki. "I never used to withdraw €60 a day - €60 is what I had a week for my expenditure."

Greek Prime Minister Alexis Tsipras looks on during a swearing in ceremony of members of his government at the Presidential Palace in Athens, Greece. New ministers in Tsipras' government were sworn in on Saturday after a reshuffle expelled dissidents from his cabinet and began a new phase of negotiations for a third bailout package (REUTERS/Alkis Konstantinidis)
Greek Prime Minister Alexis Tsipras looks on during a swearing in ceremony of members of his government at the Presidential Palace in Athens, Greece. New ministers in Tsipras' government were sworn in on Saturday after a reshuffle expelled dissidents from his cabinet and began a new phase of negotiations for a third bailout package (REUTERS/Alkis Konstantinidis)

German Economy Minister Sigmar Gabriel said this deal could succeed where previous ones failed because the European Union now emphasises growth and investment rather than just austerity.

Read more here: 'The third bailout will fail' says former Greek finance minister Yanis Varoufakis  

It would depend on reforms being enacted and "convincing the population that this is a path that allows Greece to assert itself rather than becoming a permanent alms-receiver," he said in extracts from a television interview.

GERMAN SCEPTICISM

French President Francois Hollande, who pushed hard for a deal, said the Greek crisis had weakened Europeans' faith in the European project and revived calls for the creation of a euro zone government.

"What threatens us is not an excess of Europe but its insufficiency," he wrote in an op-ed in the Journal du Dimanche weekly newspaper.

Gabriel rejected accusations Germany had been too hard on Athens and criticised Finance Minister Wolfgang Schaeuble for suggesting Greece could quit the euro zone temporarily. For her part, Merkel said the euro zone had turned its back on the idea.

Read more here: Tsipras's cabinet reshuffle delayed as fires erupt in suburbs  

But in a sign of the challenge for euro zone leaders to convince their electorates of the merits of the deal, more than half of Germans think the planned deal with Greece is bad and many would have preferred it left the euro zone, a YouGov survey seen by German newspaper Welt am Sonntag showed.

The deal struck at a euro zone summit last week allowed the European Central Bank to top up emergency credit lines which the Greek banking sector needs to survive.

"The banks are ready to open and we don't expect any major problems on Monday," an official at the Central Bank of Greece told Reuters.

As well as getting a weekly limit instead of a daily one, customers will also be able to access their safety deposit boxes and withdraw money without a credit card.

Read more here: ISEQ steady as European stocks ease on Greek anti-climax  

Deposit boxes are not affected by the capital restrictions and clients can therefore take whatever they want from them, bank officials said. But restrictions on transfers abroad and other capital controls remain in place.

"We are expecting queues in our branches in the first two or three days. Many people will ask to open their safe deposit boxes," an official at EFG Eurobank, the country's third-largest bank by assets, said.

Reuters

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