Banks re­open, Merkel urges swift bailout talks

Financial Mirror (Cyprus) - - FRONT PAGE -

Greek banks opened once again on Mon­day af­ter re­main­ing shut for three weeks, the first sign of a re­turn to nor­malcy af­ter a deal to start talks on a new pack­age of bailout re­forms.

How­ever, cap­i­tal con­trols will re­main and pay­ments and wire trans­fers abroad will still not be pos­si­ble. The stock mar­ket will also re­main closed un­til fur­ther no­tice.

Lim­its on cash with­drawals have been made slightly more flex­i­ble, with a weekly limit of EUR 420 re­plac­ing the daily EUR 60 limit.

“That’s not a nor­mal life so we have to ne­go­ti­ate quickly,” Anegla Merkel said in an in­ter­view with Ger­man public broad­caster ARD.

The Chan­cel­lor said it would be pos­si­ble to talk about chang­ing the ma­tu­ri­ties of Greece’s debt, or re­duc­ing the in­ter­est Athens has to pay af­ter the first suc­cess­ful re­view of the new bailout pack­age to be ne­go­ti­ated.

Ber­lin, the big­gest con­trib­u­tor to eu­ro­zone bailouts, would do all it could to bring talks to a suc­cess­ful con­clu­sion but would “ne­go­ti­ate hard” to en­sure Athens stuck to agree­ments, she said.

“That cer­tainly won’t be easy be­cause there are things that we have dis­cussed with all of the Greek gov­ern­ments since 2010 that have never been done, but that have been done in other coun­tries like Por­tu­gal and Ire­land,” she said.

Greeks will be able to de­posit cheques but not cash, pay bills as well as have ac­cess to safety de­posit boxes and with­draw money with­out an ATM card.

The tough terms of the bailout will see tax hikes, pen­sion cuts, strict curbs on public spend­ing, an over­haul of col­lec­tive bar­gain­ing rules and a trans­fer of EUR 50 bln of state as­sets into a spe­cial pri­vati­sa­tion fund. In ex­change, Greece is hop­ing to re­ceive loans of up to EUR 86 bln.

In­creases in value added tax agreed un­der the bailout terms have also taken ef­fect, with VAT on food and public trans­port jump­ing to 23% from 13%.

Ac­cep­tance of the bailout terms that meant the banks could re­open marked a turn­around for Prime Min­is­ter Alexis Tsipras, af­ter months of dif­fi­cult talks and a ref­er­en­dum that re­jected a less strin­gent deal pro­posed by the lenders.

He sacked party rebels in a gov­ern­ment reshuf­fle last Fri­day and is seek­ing a swift start to talks on the bailout ac­cord with Euro­pean part­ners and the IMF be­fore elec­tions, likely in Septem­ber or Oc­to­ber.

For the first time in months, tech­ni­cal teams rep­re­sent­ing the cred­i­tors are ex­pected in Athens next week, to as­sess the state of the econ­omy.

Tsipras, who barely has time to eat or sleep, ac­cord­ing to his mother, faces a fresh chal­lenge in par­lia­ment on Wed­nes­day to ap­prove a sec­ond wave of re­forms tied to its eco­nomic res­cue.

On Sun­day, pro-gov­ern­ment news­pa­per said the vote would be a “crash test” that could even re­sult in the prime min­is­ter’s res­ig­na­tion. Tsipras’ coali­tion holds 162 seats in par­lia­ment, but in last Wed­nes­day’s vote, only 123 gov­ern­ment MPs backed the bailout — just over the min­i­mum 120 re­quired to sus­tain a mi­nor­ity gov­ern­ment.

Nearly a quar­ter of Syriza’s law­mak­ers — 39 out of 149 — failed to sup­port the re­forms bill, which passed thanks to solid sup­port from op­po­si­tion par­ties.

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