Run on the banks in Greece forces closure

The stock market and banks will remain closed in Greece on Monday to stem the flood of withdrawals said Greek Prime Minister Alexis Tsipras in a televised address on Sunday.

The run on the banks began after the European Central Bank announced that it would not be expanding debt relief program that has been keeping the Euro nation above water during negotiations with creditors.

Athens asked for the emergency debt relief to continue until they can hold a referendum on their bailout plan on July 5.

Since their pleas for more relief have been rejected by the Central Bank, it is all but certain that Greece will default on their scheduled payment to the International Monetary Fund (IMF) on Tuesday.

Tsipras criticized the European Central Bank’s decision to cut their lifeline in his address Sunday.

“It is clearer than ever that this decision has no other goal apart from blackmailing the Greek people and obstructing the smooth democratic procedure of the referendum,” he said.

In a meeting on Sunday, the Greek Parliament approved the proposed referendum by a slim majority.

“I am certain that the Greek people will rise to the historical circumstances and issue a resounding ‘No’ to the ultimatum,” said a defiant Tsipras.

Even if the referendum rejects the bailout plan, it will be too late. If Greece does not meet its $1.6 billion scheduled payment Tuesday, its departure from the Eurozone would be inevitable.

Hans Jorg Schelling, Austria’s Finance Minister pointed out that Greece could only leave the EU with permission from the other Eurozone members.

Since the remaining 18 members of the common currency met without Greece on Saturday, and pledged to do what it takes to preserve the euro, it seems that they might be willing to cut Greece loose.

“The consequences for the euro countries are not nearly as bad as for Greece,” said Schelling.

 

[Reuters][New York Times][Al Jazeera Engligh]