World markets tumbled Monday as Greece shut its banks and imposed capital controls to halt a panic-driven run on ATMs, a day before Athens risked defaulting and possibly crashing out of the euro. But in a narrow ray of hope, creditors left the door open for a last-ditch debt deal to try and avert a Greek eurozone exit which would raise serious questions about the future of the EU.
Calling for a compromise, German Chancellor Angela Merkel warned that “if euro fails, Europe fails”. Global stocks fell, with Frankfurt and Paris losing more than three percent after a slump in Asia, as investors feared a ‘Grexit’. The euro steadied after hitting a one-month low under $1.10 on Sunday.
Athens issued a decree to close banks until July 6 — the day after a referendum on creditors’ bailout proposals — with a 60-euro ($65) limit on cashpoint withdrawals. Foreign tourists, a vital engine of the Greek economy, will be exempt. However, the drastic measures — designed to protect the banking system against the threat of mass panic – sent Greeks rushing to withdraw their daily allowance.
Jittery housewives, shoppers and business owners formed long lines at cash machines across Greece on a day dubbed “Black Monday”.
“No money, no hope, how did we get in this situation? This is Black Monday,” unemployed Chris Bakas, 28, told AFP as he stood sweating in the Athens sun, staring at an ATM screen. On the city’s historic Syntagma square, the scene of fierce riots in the past over biting austerity measures imposed by the country’s international creditors, tourists snapping photographs of the parliament buildings said they felt the tension in the air.
Vanguard
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