Greeks yesterday struggled to adjust to shuttered banks, closed cash machines and a climate of rumors and conspiracy theories as a breakdown in talks between Athens and its creditors plunged the country deep into crisis.
Greek Prime Minister Alexis Tsipras, who blindsided creditors by calling a referendum on the austerity cuts in the aid package proposed by the creditors, appeared on television on Sunday night to announce capital controls to prevent banks from collapsing.
Their imposition capped a dramatic weekend for Greece that has pushed the country towards a likely default on 1.6 billion euros (US$1.77 billion) of IMF loans today and closer to an exit from the euro currency bloc.
Photo: AP
French President Francois Hollande appealed to Tsipras to return to the negotiating table and German Chancellor Angela Merkel said she was willing to talk to the 40-year-old Greek leader if he wanted.
“There are a few hours before the negotiation is closed for good,” Hollande said after a Cabinet meeting on Greece.
However, with Greece’s bailout program expiring in less than a day, hopes of a last-minute breakthrough were fading fast.
Greeks — used to lengthy talks with creditors before an 11th-hour deal materializes — were left stunned.
“I can’t believe it,” Athens resident Evgenia Gekou, 50, said on her way to work. “I keep thinking we will wake up tomorrow and everything will be OK. I’m trying hard not to worry.”
European officials sent confusing signals about their next move. A spokesman for the European Commission told French radio that Brussels would not make any new proposals yesterday, appearing to contradict comments by EU Economics Commissioner Pierre Moscovici, who said that a new offer was forthcoming and the two sides were “only a few centimeters” away from a deal.
The Greek government will keep banks shut at least until after Sunday, the day of the referendum, and withdrawals from ATMs were limited to 60 euros per day when they reopened at midday. The stock exchange will also stay shut.
After months of talks, Greece’s exasperated European partners have put the blame for the crisis squarely on Tsipras’s shoulders.
As Tsipras announced the emergency measures late on Sunday, there were long lines outside ATMs and gasoline stations as people raced to take out cash before it was too late. Lines of more than a dozen people formed at ATMs when they reopened yesterday.
“I’ve got 5 euros in my pocket, I thought I would try my luck here for some money. The queues in my neighborhood were too long yesterday,” plumber Yannis Kalaizakis, 58, said outside an empty cash machine in central Athens. “I don’t know what else to say. It’s a mess.”
Newspapers splashed pictures of long lines outside cash machines on their front page. The Nafetemporiki daily headlined yesterday’s edition “Dramatic hours,” while the Ta Nea daily simply said: “When will the banks open.”
The conservative Eleftheros Typos accused Tsipras of announcing the referendum as a ruse to tip the country into early elections in the hopes of winning them.
“Mr Tsipras’ decision to call a referendum and a possible euro exit constitutes a premeditated crime,” it said in an editorial. “It is clear that Mr Tsipras has lost the trust of citizens. That’s obvious from the queues at ATMs and petrol stations, and it will become obvious at next Sunday’s ballot.”
As rumors flew about, dozens of pensioners lined up outside at least two offices of the National Bank of Greece yesterday after hearing they could withdraw pensions from some branches. They were turned away, photographers said.
Despite the financial shock, parts of daily life went on as normal, with shops, pharmacies and supermarkets in the city opening and Greeks meeting to discuss their country’s fate at cafes and restaurants.
A rally called by Tsipras’s SYRIZA party to urge voters to say “No” in the referendum on bailout terms was expected later yesterday.
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