Greeks in shock as banks shut after PM’s snap referendum call
Print Edition
STUNNED Greeks faced shuttered banks, long supermarkets lines and overwhelming uncertainty yesterday as a breakdown in talks between Athens and its international creditors plunged the country deep into crisis.
With Greece’s bailout expiring today and an International Monetary Fund payment falling due at the same time, Prime Minister Alexis Tsipras pleaded by phone with European officials to extend the program until a referendum on Sunday on its future terms.
The frantic efforts to secure Greece’s place within the eurozone followed a dramatic weekend. Tsipras’s decision, early on Saturday, to put the aid package to a popular vote took the lenders and some of Tsipras’s own negotiating team by surprise.
It also pushed Greece toward defaulting on 1.6 billion euros (US$1.8 billion) due to the IMF today.
Greeks — used to lengthy talks with creditors before an eleventh-hour deal — were left shocked by the turn of events. Lines snaked outside ATMs and inside supermarkets while fears of disruptions to petrol and medicine supplies grew.
The breakdown has pushed the European Union and eurozone into uncharted terrain. Financial markets reacted badly yesterday, with European bank shares down sharply on worries of contagion within the financial system.
“I can’t believe it,” said Athens resident Evgenia Gekou, 50, on her way to work. “I keep thinking we will wake up tomorrow and everything will be OK. I’m trying hard not to worry.”
After months of talks, Greece’s exasperated European partners have put the blame for the crisis squarely on Tsipras for rejecting a package they consider generous.
The Greeks say further austerity would simply deepen one of the worst economic crises of modern times in a country where a quarter of the workforce is already unemployed.
Emotions were unusually raw among Europe’s leaders. European Commission President Jean-Claude Juncker said he felt personally betrayed and told Greeks a “no” vote would point to a euro exit.
“I will say to the Greeks who I love deeply: you mustn’t commit suicide because you are afraid of death,” he told a news conference.
French President Francois Hollande appealed to Tsipras to return to the negotiating table and German Chancellor Angela Merkel said she was willing to talk to the Greek leader if he wanted.
The Greek government will keep banks shut at least until after Sunday, the date of the referendum, and withdrawals from automated teller machines were limited to 60 euros a day when they reopened at midday. The stock exchange will also stay shut.
The creditors wanted Greece to cut pensions and raise taxes in ways that Tsipras has long argued would be counter-productive.
As Tsipras announced the closure of banks and the stock exchange late on Sunday, there were long queues outside ATMs and petrol stations as people raced to take out cash before it was too late. Lines formed at ATMs when they reopened yesterday.
“I’ve got 5 euros in my pocket, I thought I would try my luck here for some money. The queues in my neighborhood were too long (Sunday),” said plumber Yannis Kalaizakis, 58, outside an empty cash machine in central Athens yesterday.
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