Greece close to financial collapse

Published: Monday 29th June 2015 by The News Editor

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Greece is teetering on the brink of financial collapse as banks and the stock exchange remain closed today after crucial routes to financial support hit a dead end.

European Central Bank (ECB) emergency finance lines were kept open but further credit was refused just a day after bailout extension pleas were rejected by the eurozone.

Many savers found cashpoints empty as they flocked to withdraw money in the hours after the announcement of a snap referendum on austerity proposals put forward by creditors.

Capital controls – restrictions on withdrawals and transfers – are set to be imposed on Greeks and it is unclear how long banks will remain closed.

British travellers heading to Greece have been told to take enough euros to cover emergencies amid concerns the country’s bank could run out of money.

The Foreign Office issued updated travel advice warning tourists they may face problems using credit cards or withdrawing funds from cash machines following the economic turmoil.

It said: “Visitors to Greece should be aware of the possibility that banking services – including credit card processing and servicing of ATMs – throughout Greece could potentially become limited at short notice.

“Make sure you have enough Euros in cash to cover emergencies, unforeseen circumstances and any unexpected delays.”

Abta, the Association of British Travel Agents, also urged tourists to take enough cash to cover emergency situations.

A spokesman added: “However, 50% of the people on package holidays in Greece will be on all-inclusive deals where the vast majority of their expenses are paid up front.”

Capital controls imposed in Cyprus in 2013 did not have a significant impact on holiday makers because the restrictions were imposed on locals, he added.

Greece must meet a debt repayment of 1.6 billion euro (£1.1 billion) to the International Monetary Fund tomorrow.

If it fails to meet the deadline it will be declared in default, pushing it towards the exit door from the single currency.

Greek prime minister Alexis Tsipras told savers their bank deposits are safe and attacked the Eurogroup of finance ministers and the ECB for attempting to “stifle the will” of the people.

He said: “The recent decisions of the Eurogroup and ECB have only one objective: to attempt to stifle the will of the Greek people.

“They will not succeed. The very opposite will occur: the Greek people will stand firm with even greater wilfulness.

“In the coming days, what’s needed is patience and composure. The bank deposits of the Greek people are fully secure.

“The same applies to the payment of wages and pensions – they are also guaranteed.

“In these critical hours, we must remember that the only thing to fear is fear itself.”

Eurozone ministers criticised Mr Tsipras for announcing a popular vote would be held next Sunday on the bailout proposals, a move they said effectively cut dead negotiations.

Greek finance minister Yanis Varoufakis insisted exit from the eurozone is not inevitable. The bailout crisis was a “dark hour” for Europe but the nation had a “clear conscience” over its actions, he added.

Mr Varoufakis insisted there was “absolutely no reason” that a Grexit was inevitable and a “no” vote in the poll “doesn’t have to and it shouldn’t” mean the country ends up leaving the single currency.

Published: Monday 29th June 2015 by The News Editor

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