ATHENS, greece — Greece’s five-year financial crisis took its most dramatic turn yet, with the Cabinet deciding after an eight-hour session that Greek banks would remain shut for six business days and restrictions would be imposed on cash withdrawals. The Athens Stock Exchange also will not open Monday, financial sector officials confirmed.
The moves were meant to staunch the flow of money out of Greek banks and spur the country’s creditors to offer concessions before a bailout program expires Tuesday. The accelerating crisis has thrown into question Greece’s financial future and continued membership in the 19-nation shared euro currency — and even the European Union.
For the past two days, Greeks have been rushing to ATMs to withdraw money across the country following Prime Minister Alexis Tsipras’ sudden weekend decision to call a referendum on creditor proposals for Greek reforms in return for vital bailout funds.
A decree published early Monday in the official Government Gazette stipulates banks will not open Monday morning and would remain closed through July 6. The finance minister could decide to shorten or extend that period.
Withdrawals from ATMs will be capped at 60 euro ($66) daily. The decree said ATMs would be working at the latest 12 hours from its publication, meaning cash machines should open by early afternoon.
Web banking transactions would be mostly free, allowing Greeks to pay bills online. However, they cannot move money to accounts abroad. Credit and bank cards issued abroad can be used at ATMs with no restrictions, benefiting foreign visitors to Greece and its tourist industry.
Tsipras blamed the Eurogroup, the gathering of the eurozone’s finance ministers, and its decision to reject a request for the bailout program, which expires June 30. He again asked for it to be extended by a few days to allow for a referendum.
The referendum decision, ratified by Parliament after a marathon 13-hour session that ended in the early hours of Sunday, shocked and angered Greece’s European partners. The country’s negotiations with its European creditors have been suspended, with both sides accusing each other of being responsible for talks breaking off.
In the referendum set for next Sunday, the government is urging Greeks to vote against its creditors’ proposals, arguing that they are humiliating and that they would prolong the country’s financial woes.
Two opinion polls published Sunday indicated that more Greeks want to stay in the eurozone and make a deal with creditors than want a rupture with the country’s European partners. Both polls were conducted before Tsipras’ referendum call, but they provide an indication of public sentiment.
