Greece Crisis: Banks Shut For Week, Restrictions Imposed on ATMs

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/ Source: Associated Press

ATHENS, Greece — Greece imposed restrictions on money withdrawals and banking transactions to keep its financial system from collapsing due to a run on the banks.

Anxious Greeks rushed to ATMs to withdraw cash after Prime Minister Alexis Tsipras called late Friday for a referendum on the creditors' reform proposals.

Here is a look at what Greece's so-called capital controls entail:

  • Banks will remain closed from Monday until at least next Monday, July 6, the day after the referendum.
  • Cash withdrawals from ATMs will have a daily limit of 60 euros ($67) per card.
  • Credit and debit card transactions within the country will not be limited. In practice, however, many retailers were already not accepting card transactions as of Monday morning, and were demanding cash payments only.
  • Internet and phone banking within the country will have no restrictions, but no money can be transferred out of the country.
  • For emergency needs, such as importing medicines or sending remittances abroad, the Greek Treasury will create a Banking Transactions Approval Committee to examine requests on a case-by-case basis.
  • Foreign bank cards, whether debit or credit, will not be affected and tourists will be able to withdraw the full amounts their own banks allow them to.

Meanwhile, retirees lined up just after dawn at bank branches hoping they would be able to receive their pensions, which were due to be paid Monday. The finance ministry said the manner in which pensions would be disbursed would be announced later in the afternoon.

The referendum has been set for Sunday, and the government has been advocating Greeks vote against the proposals.

The capital controls are meant to staunch the flow of money out of Greek banks and spur the country's creditors to offer concessions before Greece's international bailout program expires Tuesday. Once that happens, Greece loses access to the remaining 7.2 billion euros ($8.1 billion) of rescue loans, and is unlikely to be able to meet a 1.6 billion-euro debt repayment to the International Monetary Fund due the same day.

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.