Greek Banks Ready to Open as Merkel Urges Swift Bailout Talks

Greek banks to reopen but restrictions to stay.

Greek banks are ready to open their branches across the country on Monday after a three-week shutdown, officials said, while German Chancellor Angela Merkel called for swift aid talks so Athens could also lift withdrawal limits.

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.

Capital controls and restrictions on withdrawals will remain in place but we are entering a new stage which we all hope will be one of normality.
– Louka Katseli, head of Greece’s banking association

Restrictions to Stay

Greeks will be able to withdraw 420 euros a week at once instead of just 60 euros a day, but the limit will effectively remain the same and capital controls will also stay in place.

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

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 euro zone 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.
– Angela Merkel, German Chancellor

PM’s Popularity Still High?

Acceptance of the bailout terms that meant the banks could reopen marked a turn-around for Greek Prime Minister Alexis Tsipras after months of difficult talks and a referendum that rejected a less stringent deal proposed by the lenders.

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 an unemployment rate of 25% .

Greeks will be able to deposit, although not cash, cheques, pay bills as well as have access to safety deposit boxes and withdraw money without an ATM card.

Deposit boxes are not affected by the capital restrictions and clients can therefore take whatever they want from them, bank officials said.

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

Euro Zone Sceptical

EU officials hope the bailout deal will be in place by mid-August when Greece needs to make new payments to the European Central Bank to redeem its maturing debt. A 7.16 billion euro bridge financing is enough to see Athens through July - including a July 20 ECB repayment – but not through August.

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.

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.

French President Francois Hollande, who pushed hard for a deal, said the Greek crisis had weakened Europeans’ faith in the European project.

“What threatens us is not an excess of Europe but its insufficiency,” he wrote in an op-ed in the Journal du Dimanche newspaper, reiterating calls for the creation of a euro zone government.