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Greeks announce shock referendum on euro future throwing banking system into turmoilGreeks rushed to withdraw cash from ATMs in the early hours of Saturday morning. Greece's Alpha Bank stopped all online transactions according to its website on Friday night. In a sign of how desperate the government's cash grab has become, it failed to make payments to thousands of the country's pensions on Friday and had to rely on funds from the central bank instead.Greece's paymasters are demanding the government hike VAT on processed foods, restaurants, hotels and the country's popular holiday islands, in return for cash they need to avoid a debt default on June 30.The proposals have been fiercely resisted by the Leftist Syriza as punishing the poor and crippling the country's thriving tourist industry. Bank deposits have fallen to an 11-year low, pushing the financial system to the brink of insolvency.
Greek debt crisis: ECB faces monumental decisionsSo the European Central Bank, operating through the Bank of Greece, would in theory be prohibited under its own rules from continuing to provide Emergency Liquidity Assistance - the name for the life-or-death support provided by the ECB - to the banks.That said, officials and bankers tell me that the last thing the ECB wants to be seen to be doing is cause total financial and economic mayhem in Greece - which would be the consequence of any statement this weekend that it is curtailing support for Greek banks."The ECB cannot be seen to be an agent of economic collapse in Greece," one source close to the ECB told me."It will bend over backwards to see if they can find a way to support the banks through the uncertain days before the poll."Much hinges, therefore, on any statement later today from the Eurogroup of finance ministers, after their scheduled meeting. Because of the fragility of Greek banks, this is the most important weekend in the eurozone's 16-year life.Financial decisions will be taken, by eurozone finance ministers and the European Central Bank, that will have profound social and political consequences - mainly for Greece, but also for the whole European monetary project.
The Latest: Germany says that Greece's move to call vote appears to end bailout talks
Eurogroup statement on Greece
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Topic: 27/06/15 (Read 1542 times)
