Finance Minister Yanis Varoufakis has said that Greece will not make the deadline on Tuesday for repaying the debt to the International Monetary Fund
Prime Minister Alexis Tsipras took the decision on Sunday to call a referendum on international creditors’ latest economic proposals. Following a breakdown in talks between Greece and its creditors, the country is in the midst of the one of the most acute financial crises seen anywhere in the world in recent years.
Greece’s population tried to fathom the sheer scale of the impact on their day-to-day existence. Greek’s worried pensioners swarmed closed bank branches on Monday and long queues stood outside ATMs as the people endured the first day of serious controls on their daily economic lives ahead of a July 5 referendum that could determine whether the country has to ditch the euro currency and return to the Drachma, the modern Greek currency which was replaced by Euro in 2001.
The economic crisis has stoked fears of a crippling bank run, a messy debt default and an exit from the euro. As a result, the country’s government imposed strict capital controls, none more onerous than a daily allowance of a measly 60 euros (USD 67) at the ATM.
The sense of unease was palpable among the crowds of pensioners who lined up outside bank branches hoping they might open. Many elderly Greeks don’t have ATM cards and make cash withdrawals in person, and so found themselves completely cut off from their money.
“I came here at 4 a.m. because I have to get my pension,” said 74-year-old Anastasios Gevelidis, one of about 100 retirees waiting outside the main branch of the National Bank of Greece in the country’s second-largest city of Thessaloniki.
“I don’t have a card. I don’t know what’s going on. We don’t even have enough money to buy bread,” the pensioner added.
The capital controls move come ahead of a big 1.6 billion-euro payment Greece has to make to the International Monetary Fund. It’s unlikely to be able to pay that without financial assistance.
Greece’s bailout program with its European creditors officially expires on Tuesday, meaning the country will not have access to any of the money still available if it doesn’t secure a deal.
The left-wing-led Greek government, elected in last January on a promise to bring an end to the hated austerity that it blames for an acute economic recession, has failed to agree on a package of spending cuts and reforms demanded by creditors in exchange for access to the remaining 7.2 billion euros ($8.1 billion) in rescue loans.
(With inputs from the PTI)