|
 Prime Minister Alexis Tsipras, who blindsided creditors by calling a
referendum on the austerity cuts in the aid package proposed by the
creditors, appeared on television on Sunday night to announce
capital controls to prevent banks from collapsing.
Their imposition capped a dramatic weekend for Greece that has
pushed the country towards a likely default on 1.6 billion euros
($1.77 billion) of International Monetary Fund loans on Tuesday and
closer to an exit from the euro currency bloc.
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 40-year-old Greek leader if he wanted.
"There are a few hours before the negotiation is closed for good,"
Hollande said after a cabinet meeting on Greece.
But with Greece's bailout program expiring in less than 48 hours,
hopes of a last-minute breakthrough were fading fast. Greeks - used
to lengthy talks with creditors before a eleventh-hour deal
materializes - were left stunned.
"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."
European officials sent confusing signals about their next move. A
spokesman for the European Commission told French radio that
Brussels would not make any new proposals on Monday, appearing to
contradict comments by EU Economics Commissioner Pierre Moscovici.
He said a new offer was forthcoming and that the two sides were
"only a few centimeters" away from a deal.
European bank shares fell sharply on Monday. Top banks in Spain,
France and Germany were down more than 6 percent as the risk of a
spillover to banks in other peripheral euro zone countries spooked
investors.
The Greek government will keep banks shut at least until after July
5, 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.
After months of talks, Greece's exasperated European partners have
put the blame for the crisis squarely on Tsipras's shoulders.
The creditors wanted Greece to cut pensions and raise taxes in ways
that Tsipras has long argued would deepen one of the worst economic
crises of modern times in a country where a quarter of the workforce
is already unemployed.
As Tsipras announced the emergency measures 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 of over a dozen people
formed at ATMs when they reopened on Monday.
"I've got five euros in my pocket, I thought I would try my luck
here for some money. The queues in my neighborhood were too long
yesterday," said plumber Yannis Kalaizakis, 58, outside an empty
cash machine in central Athens on Monday.
"I don't know what else to say. It's a mess."
"DRAMATIC HOURS"
Newspapers splashed pictures of long lines outside cash machines on
their front page. The Nafetemporiki daily headlined Monday's edition
"Dramatic hours" while the Ta Nea daily simply said: "When will the
banks open".
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The conservative-leaning Eleftheros Typos newspaper accused Tsipras
of announcing the referendum as a ruse to tip the country into early
elections in the hopes of winning them.
"Mr Tsipras's decision to call a referendum and a possible euro exit
constitutes a premeditated crime," it said in an editorial. "It is
clear that Mr Tsipras has lost the trust of citizens. That's obvious
from the queues at ATMs and petrol stations, and it will become
obvious at next Sunday's ballot."
As rumors flew about, dozens of pensioners queued outside at least
two offices of the National Bank of Greece on Monday after hearing
they could withdraw pensions from some branches. They were turned
away, Reuters photographers said.
"I've worked all my life, only to wake up one morning to a disaster
like this," said one shop owner, who was there to collect his wife's
pension.
Despite the financial shock, parts of daily life went on as normal,
with shops, pharmacies and supermarkets in the city opening and
Greeks meeting to discuss their country's fate at cafes and
restaurants. Tourists gathered as usual to watch the changing of the
presidential guard outside parliament.
A rally called by Tsipras's Syriza party to protest against
austerity measures and urge voters to say "No" in the referendum on
bailout terms is expected later on Monday.
Officials around Europe and the United States made a frantic round
of calls and organized meetings to try to salvage the situation.
U.S. President Barack Obama called Merkel, and senior U.S. officials
including Treasury Secretary Jack Lew, who spoke to Tsipras, urged
Europe and the IMF to come up with a plan to hold the single
currency together and keep Greece in the euro zone.
"While the program is active until Tuesday, they aren't providing
the necessary liquidity for Greek banks just to blackmail and to
terrorize us," Administrative Reforms Minister George Katrougalos
told Antenna television.
"If we vote a yes, they will demolish pensions, you will have to pay
for medicare in public hospitals. When your kids can't go to school
you will say 'thanks' and they will say 'you asked for it'.
"But if you say no you have the ability to fight for a better
future."
($1 = 0.9026 euros)
(Additional reporting by Deepa Babington, Lefteris Karagiannopoulos,
Yannis Behrakis and Alkis Konstantinidis; Writing by Matthias
Williams and Deepa Babington; Editing by Anna Willard)
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