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Wednesday 7 December 2016

Greece shuts banks, brings in ATM limits

Published 29/06/2015 | 02:30

Anxious Greeks queue in front of the National Bank to withdraw cash following the collapse
of EU bailout talks
Anxious Greeks queue in front of the National Bank to withdraw cash following the collapse of EU bailout talks

Greece has closed its banks for a week to prevent worried savers from emptying their accounts following the collapse of bailout talks with the troika.

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The dramatic move capped a weekend that saw Greece lurch closer to default on an IMF payment tomorrow and even a potential exit from the euro next week.

Greek banks will stay closed until after next Sunday’s referendum on the terms of the next bailout, officials said.

And limits are being placed on the amount depositors can withdraw – reportedly as low as €60 a day.

The decision to close banks and the stock exchange was made as almost two-thirds of Greek ATMs ran out of money following the announcement of Sunday’s snap referendum, which could become a simple vote on whether Greece leaves the eurozone.

The bank closures and currency controls to prevent money leaving the country became inevitable once the European Central Bank decided it would not raise the amount of cash it lends to Greek banks.

Greece will become the second euro area country, after Cyprus in 2013, to impose capital controls.

EU leaders and their officials will meet today to discuss strategies to quarantine Greece from the rest of the currency bloc, while also keeping it from spinning out of the euro’s orbit.

The serious worsening of the Greek crisis is expected to trigger a sharp sell-off in the euro and European shares when financial markets open today, shattering the relative calm seen in recent weeks.

Officials here will be keeping an eye on how Irish bonds perform. Experts said yesterday that Spain, Portugal and Italy’s borrowing costs could spike.

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