Greek banks to remain shut for a week
The Greek government passed a decree announcing that the country's banks will remained closed until the country holds its referendum on bailout terms on 5 July, and that restrictive measures on withdrawals will be applied with effect from Monday.
Read more: Greek MPs vote in favour of 5 July referendum on bailout terms
The decree, entitled “Bank Holiday break” , signed by Greece's PM Alexis Tsipras and the country's President Prokopis Pavlopoulos, cited the “extremely urgent” need to protect the Hellenic financial system due to the lack of liquidity caused by the Eurogroup's decision, on 27 June, to refuse the extension of the loan agreement with Greece.
As a consequence, the Greek Stock Exchange will remained closed on Monday, and cash machine withdrawals in the country will be limited to €60 per customer, although the measure will not apply to holders of foreign bank cards.
Transfers of money to destinations outside Greece will also be prohibited, and will require an approval by a Ministry of Finance commission.
In a brief televised address to the nation on Sunday night, Tsipras confirmed these restrictive measures but assured that pensions and wages would remain ‘unaffected’.
Greek PM also urged the Greek people to have composure and patience, and added that the ECB's refuse to extend the loan constituted “an unprecedented challenge to European affairs an action that seeks to bar the right of a sovereign people to exercise their democratic prerogative.”
“It is clear that the objective of the Eurogroup's and ECB's decision is to attempt to blackmail the will of the Greek people and to hinder democratic processes,” Tsipras added.
The dignity of the Greek people in the face of blackmail and injustice will send a message of hope and pride to all of Europe. #Greece
— Alexis Tsipras (@tsipras_eu) June 28, 2015
Greece has the historic opportunity to send a message of hope and dignity to Europe and the world
Tsipras commented that Greece had the “historic opportunity to send a message of hope and dignity to Europe and the world, ” adding that the country “will deal with any difficulties with calmness and determination.”
“The more calmly we confront difficulties, the sooner we will overcome them and the milder their consequences will be.”
The country is due to repay €1.6bn to the International Monetary Fund on Tuesday.
“We are on the 'default, but no Grexit' path, but this is not sustainable given the very negative sentiment between Greece and its creditors,” commented Danske Bank analysts.
OANDA senior market analyst Craig Erlam pointed out that the referendum will weigh heavily on investor sentiment throughout the week, "particularly towards the end as the all-important vote takes place at a time when the markets are once again closed."
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