Banks reopen, Merkel urges swift bailout talks
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.