By Scott Neuman
A security worker brings money to a National Bank branch in Athens, Greece, on Sunday. Greeks have been withdrawing euros in anticipation of a possible default on the country’s debt payments early next week. Marko Djurica/Reuters/Landov hide caption
itoggle caption Marko Djurica/Reuters/Landov
As Greeks rush to withdraw cash ahead of a looming default on the country’s international debt payments and a possible exit from the Eurozone, Greece is considering closing its banks on Monday in an effort to stave off a total financial collapse.
Finance Minister Yanis Varoufakis tells the BBC that his government is weighing the option at an emergency meeting today.
.@yanisvaroufakis tells @BBCMarkMardell: Greek Govt will be looking overnight at imposing capital controls & closing banks on Monday. #tw2
— Nick Sutton (@suttonnick) June 28, 2015
Meanwhile, Germany’s Foreign Ministry has advised travelers to Greece to make sure they have enough euros on hand before they arrive in the country.
The drama comes as the European Central Bank is in heated discussions about whether to extend Greece’s financial lifeline.
As Joanna Kakissis reports from Athens for NPR, “Some European leaders say the Greek government closed the door on negotiations by calling a referendum. Others are pushing for a compromise to preserve the euro.”
As The New York Times reports:
“The central bank’s 25-member governing council, convened by conference call, was discussing how and whether to extend an emergency line of credit — currently worth more than 85 billion euros, or $95 billion — that in recent weeks has kept Greek banks from collapsing.
“Analysts say that without these funds, Greek banks would not have sufficient money to provide to panicky savers if they opened on Monday. Without a continued flow of money to consumers and businesses, Greece’s struggling economy would probably lapse deeper into recession.”
Greeks began lining up at ATM machines on Saturday, after Prime Minister Alexis Tsipras announced a nationwide referendum for July 5 on an international bailout for Athens – a move roundly criticized by Greece’s creditors as a delay tactic. The deadline for a 1.6 billion euro ($1.9 billion) payment to the International Monetary Fund is Tuesday. But Greece and its lenders have already walked away from the bargaining table.
Reuters says that while some ATMs in Greece were spitting out their last euros, other machines were being replenished. It says a top Greek financial official urged people on Sunday to remain calm and not withdraw all their savings.
Civil engineer Dimitris Kostoulas says he fears bank withdrawals will be limited on Monday. “I believe that everyone is nervous. Not only us. We’ll see what happens,” he tells NPR.
“We are very very close to the edge. What was sometimes seen as scaremongering is something that could happen over the next few days,” economist Platon Tinios says.
If Athens misses its payment, it would likely be forced out of the Eurozone and revert to its previous currency, the drachma. High inflation and years of financial instability would result.
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