Biodun Iginla, BBC News

Biodun Iginla, BBC News

Monday, July 20, 2015

Greek debt crisis: Banks reopen amid tax rise

by Isabelle Roussel and Biodun Iginla, BBC News, Athens

2 hours ago


Greek banks are reopening after three weeks of closures sparked by the deadlock over the country's debt.
Athens reached a cash-for-reforms deal aimed at avoiding a debt default and an exit from the eurozone.
But many restrictions remain, including a block on money transfers abroad, and Greeks also face price rises with an increase in Value Added Tax (VAT).
Meanwhile, Germany has said it is prepared to consider further debt concessions to Greece.
Queues at ATMs have been a feature of life in Greece for weeks, with people waiting in line each day to withdraw a maximum of €60 (£41) a day, a restriction imposed amid fears of a run on banks.
Media caption Mark Lowen from a traditional taverna in Greece on the likely impact of VAT increases
From Monday, the daily limit becomes a weekly one, capped at €420 (£291), meaning Greeks will not have to queue every day.
An architect told the BBC that the banks re-opening will make only a small difference to his ability to operate:
"The key challenge is that we cannot pay our suppliers, which means that we will eventually run out of products to sell," Vassilis Masselos told the BBC World Service's Newsday programme.

Greece's recession

While banks throwing open their doors marks the return of some normality to the Greek economy, long-term problems remain.
Unemployment is stubbornly high, and as this chart shows, Greece's recession is comparable to one of history's most famous economic crashes.
How bad are things for the Greeks?
The scale of hardship
But a block on transfers to foreign banks and a ban on cashing cheques remain in place.
Greeks will also pay more on a range of goods and services, including taxis and restaurants, with VAT rising from 13% to 23%.
The rise was among a package of reforms demanded by Greece's creditors to open talks on the proposed €86bn bailout.
Greeks and tourists will have to pay more in restaurants, with a VAT rise imposed by creditors coming in
The Greek government has a new look after a reshuffle replaced ministers opposing the deal
Members of Prime Minister Alexis Tsipras' party rebelled against the austerity measures demanded by creditors when it was voted through parliament.
But it paved the way for Greece to receive a bridging loan, which enables the reopening of the banks and for Athens to repay debts of €4.2bn, (including €700m in interest), to the European Central Bank due on Monday.

German row

Both Greece and the IMF have been arguing for a restructuring of its €320bn debt, saying its current position is "unsustainable".
German Chancellor Angela Merkel ruled out "a classic haircut" - a markdown of Greece's debts.
But she told German television other forms of relief, such as extending maturities or slashing interest rates, could be considered once the details of the latest programme are worked out.
She also played down reports of a row with her Finance Minister Wolfgang Schaeuble, who suggested in an interview with Der Spiegel magazine that he would rather resign than defend something he did not believe in.
"The finance minister will, like me, conduct these negotiations and I can only say that no-one came to me and asked to be relieved," said Ms Merkel when asked about the suggestion.
Germany, which is the largest contributor to Greek rescue funds, has taken a tough line on Greece.
At one point in the fraught talks over the bailout, Mr Schaeuble suggested Greece could temporarily leave the eurozone while it stabilises its economy.
Mr Tsipras, who has reshuffled his cabinet to replace rebellious ministers, has another set of reforms to push through parliament on Wednesday.
In a damning assessment, his former Finance Minister Yanis Varoufakis told the BBC the economic programme imposed on Greece was "going to fail".
Are you in Greece? Has the recent economic uncertainty affected you? You can share your experiences by emailing haveyoursay@bbc.co.uk.
Please include a contact number if you are willing to speak to a BBC journalist. You can also contact us in the following ways:
Or comment here:
Required field
If you are happy to be contacted by a BBC journalist please leave a telephone number that we can contact you on. In some cases a selection of your comments will be published, displaying your name as you provide it and location, unless you state otherwise. Your contact details will never be published. When sending us pictures, video or eyewitness accounts at no time should you endanger yourself or others, take any unnecessary risks or infringe any laws. Please ensure you have read the terms and conditions.

Terms and conditions
 
More Videos from the BBC

No comments:

Post a Comment