Greece imposes capital controls, closes banks

By Helen Pooper

Prime Minister Tsipras acts after talks with creditors collapse and ECB declines to increase support for Greece's beleaguered banking system.

ATHENS — Greek banks will be shuttered from Monday on and withdrawals will be limited, the government announced late Sunday, as authorities tried to stem a flood of cash fleeing the country after a collapse of talks with the country’s creditors over the weekend. The Athens Stock Exchange will also not open.
Alexis Tsipras, the country’s left-wing prime minister, put the blame for the crisis on Greece’s negotiating partners from the eurozone countries and on the European Central Bank, which Sunday declined to increase its liquidity support for the Greek banking system beyond the current €89 billion.

“They are the only ones who can as quickly as possible, even this evening, reverse the Eurogroup’s decision and give the ECB the opportunity to replace the banks’ liquidity,” Tspiras said in a nationally televised address Sunday evening.

“It is more than obvious that the decision has no other intention than to blackmail the will of the Greek people” — Greek PM Tsipras on the ECB’s decision not to increase liquidity support

He said the decision of the ECB not to raise the liquidity limit had forced the Greek central bank to impose a bank holiday and limits on cash withdrawals. The country’s financial markets council said the step was needed “in order to handle the current crisis efficiently.”
In his address, Tsipras said: “It is more than obvious that the decision has no other intention than to blackmail the will of the Greek people and to hamper the smooth carrying out of referendum.”
The breakdown in talks was prompted by his surprise decision Saturday to call a referendum on July 5 on whether or not Greeks support an austerity program suggested by the country’s creditors in order to release desperately needed bailout cash. Early on Sunday morning, Parliament backed the referendum. Tspiras and his populist Syriza party government intend to campaign against accepting the conditions.
“They will not succeed,” he said. “This initiative will have exactly opposite result. They will make the people even more steadfast in their decision to reject the outrageous proposals and ultimatums of the creditors.”
In Athens, lines quickly formed outside of ATMs, some of which had run out of cash.
“I’m not going to get paid on time,” said Alex, a shop assistant. “Banks will be closed on the day. But I don’t have any deposits. I didn’t panic. But it does make me feel uneasy.”
The bank closure could become a potent weapon for Tspiras’s opponents. “In all these years we haven’t had the banks closed, not even for five minutes,” tweeted opposition lawmaker and former economy minister Evangelos Venizelos.