ATHENS – Greece announced early Monday it will shut banks for a week and impose capital controls and shut banks for a whole week after a decision by the European Central Bank not to extend emergency funding.
Banks will be closed until July 6 – the day after a referendum on bailout proposals – with a 60-euro (S$89) limit on ATM withdrawals, but foreign tourists, a vital engine of the Greek economy, will be exempt from the restrictions, an official decree said.
In the first market reaction to the growing risk of a Greek euro exit, the Tokyo and Sydney stock markets plunged almost 2 per cent at the open on Monday morning, while the euro briefly tumbled to less than $1.1.
The drastic measures to protect Greece’s banking system against the threat of mass panic came after the European Central Bank said it would not increase its financial support to Greek lenders despite early signs of a chaotic bank run.
After months of wrangling, Greece’s exasperated European partners have put the blame for the crisis squarely on Greek Prime Minister’s shoulders.
The 40-year-old premier caught them by surprise in the early hours of Saturday by rejecting the demands of lenders and calling a referendum on the bailout
