Greek banks ready to open Monday as Merkel urges swift bailout talks

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Greeks Divided Over New Bailout Terms as Country Prepares to Reopen Banks

Greek banks are ready to open their branches across the country on Monday after a three-week shutdown, officials said, while German Chancellor Angela Merkel called for swift aid talks so Athens could also lift withdrawal limits.

The cautious reopening of the banks, and an increase in value added tax on restaurant food and public transport from Monday, are aimed at restoring trust inside and outside Greece after an aid-for-reforms deal last week averted bankruptcy.

Greek Prime Minister Alexis Tsipras is trying to turn a corner after he reluctantly agreed to negotiate a third bailout, allowing the European Central Bank to top up bank credit lines but prompting a rebellion in his leftist Syriza party.

"Capital controls and restrictions on withdrawals will remain in place but we are entering a new stage which we all hope will be one of normality," the head of Greece's banking association Louka Katseli told Skai television.

Greeks will be able to withdraw 420 euros a week at once instead of just 60 euros a day, but the limit will effectively remain the same and capital controls will also stay in place.

"That's not a normal life so we have to negotiate quickly," Merkel said in extracts from an interview with German public broadcaster ARD.

See photos of Greece in the midst of the financial crisis:

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Greece after the referendum
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Greek banks ready to open Monday as Merkel urges swift bailout talks
ATHENS, GREECE - JULY 13: Pensioners talk to bank staff as they wait to collect their pensions outside a National Bank of Greece branch in Kotzia Square on July 13, 2015 in Athens, Greece. Eurozone leaders have reportedly made an 'agreement' on the Greek debt crisis in Brussels. After lengthy talks EU President Donald Tusk tweeted that a bailout programme was 'all ready to go'. (Photo by Christopher Furlong/Getty Images)
A woman burns the flag of the ruling party Syriza, surrounded by journalists, in front of the Greek parliament in Athens, during an anti-EU demonstration in Athens calling for a no to any agreement with the creditors on July 13 , 2015. Eurozone leaders struck a deal on a bailout to prevent debt-stricken Greece from crashing out of the euro forcing Athens to push through draconian reforms in a matter of days. AFP PHOTO/ LOUISA GOULIAMAKI (Photo credit should read LOUISA GOULIAMAKI/AFP/Getty Images)
Leftist protester holds a greek flag in front of the Greek parliament as they take part an anti-EU demonstration in Athens calling for a 'NO' to any agreement with the creditors on July 13, 2015. Eurozone leaders struck a deal Monday on a bailout to prevent debt-stricken Greece from crashing out of the euro, forcing Athens to push through draconian reforms in a matter of days. AFP PHOTO / ANDREAS SOLARO (Photo credit should read ANDREAS SOLARO/AFP/Getty Images)
People read newspaper headlines in central Athens on July 13, 2015. Greece reached a desperately-needed bailout deal with the eurozone on July 13 after marathon overnight talks, in a historic agreement to prevent the country crashing out of the European single currency. The country's leftist Prime Minister Alexis Tsipras agreed to tough reforms after 17 hours of gruelling negotiations in return for a three-year bailout worth up to 86 billion euros ($96 billion), Greece's third rescue programme in five years. AFP PHOTO / ARIS MESSINIS (Photo credit should read ARIS MESSINIS/AFP/Getty Images)
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Merkel said it would be possible to talk about changing the maturities of Greece's debt or reducing the interest Athens has to pay after the first successful review of the new bailout package to be negotiated.

Berlin, the biggest contributor to eurozone bailouts, would do all it could to bring talks to a successful conclusion but would "negotiate hard" to ensure Athens stuck to agreements, she said.

"That certainly won't be easy because there are things that we have discussed with all of the Greek governments since 2010 that have never been done but that have been done in other countries like Portugal and Ireland," she said.

ELECTIONS

Acceptance of the bailout terms that meant the banks could reopen marked a turnaround for Tsipras after months of difficult talks and a referendum that rejected a less stringent deal proposed by the lenders.

He sacked party rebels in a government reshuffle on Friday and is seeking a swift start to talks on the bailout accord with European partners and the IMF before elections which Interior Minister Nikos Voutsis said were likely in September or October.

But while opinion polls suggest the prime minister's popularity remains high, on the streets of Athens some were sceptical that the bank reopening would change much in a recession-hit country with over 25 percent unemployment rate.

"The banks opening tomorrow won't change anything for me," said 31-year old hotel worker Joanna Arvanitaki. "I never used to withdraw 60 euros a day - 60 euros is what I had a week for my expenditure."

Greeks will be able to deposit, although not cash, cheques, pay bills as well as have access to safety deposit boxes and withdraw money without an ATM card.

Deposit boxes are not affected by the capital restrictions and clients can therefore take whatever they want from them, bank officials said.

"We are expecting queues in our branches in the first two or three days. Many people will ask to open their safe deposit boxes," an official at EFG Eurobank (EURBr.AT), the country's third-largest bank by assets, said.

Greek pensioners waiting outside banks to collect money:

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Greece Bailout Bankruptcy
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Greek banks ready to open Monday as Merkel urges swift bailout talks
ATHENS, GREECE - JULY 03: Pensioners without ATM cards wait in queue outside a bank branch to withdraw money from their pension funds on July 03, 2015 in Athens, Greece. (Photo by Salih Baran/Anadolu Agency/Getty Images)
Pensioners wait outside a closed branch of the Greek National bank in Thessaloniki on June 29, 2015 as Greece ordered its banks to shut for one week and imposed capital controls today, sending markets tumbling after its citizens emptied ATMs on the eve of a potentially disastrous default. In a ray of hope, creditors left the door open to Greece for a last-ditch debt deal, in order to try and avert a dangerous default that could spark a Greek eurozone exit and raise serious questions about the future of the European Union. AFP PHOTO / SAKIS MITROLIDIS (Photo credit should read SAKIS MITROLIDIS/AFP/Getty Images)
ATHENS, GREECE - JUNE 29: People wait in line to withdraw 60 euros from an ATM after Greece closed its banks on June 29, 2015 in Athens, Greece. Greece closed its banks and imposed capital controls on Sunday to monitor the growing strains on its crippled financial system, bringing the prospect of being forced out of the euro into plain sight. (Photo by Milos Bicanski/Getty Images)
A man withdraws the withdrawal limit of 60 euros at an ATM machine in Thessaloniki on June 29, 2015 as Greece ordered its banks to shut for one week and imposed capital controls today, sending markets tumbling after its citizens emptied ATMs on the eve of a potentially disastrous default. In a ray of hope, creditors left the door open to Greece for a last-ditch debt deal, in order to try and avert a dangerous default that could spark a Greek eurozone exit and raise serious questions about the future of the European Union. AFP PHOTO / SAKIS MITROLIDIS (Photo credit should read SAKIS MITROLIDIS/AFP/Getty Images)
Pensioners queue outside a closed branch of the Greek National bank in Thessaloniki on June 29, 2015 as Greece ordered its banks to shut for one week and imposed capital controls today, sending markets tumbling after its citizens emptied ATMs on the eve of a potentially disastrous default. In a ray of hope, creditors left the door open to Greece for a last-ditch debt deal, in order to try and avert a dangerous default that could spark a Greek eurozone exit and raise serious questions about the future of the European Union. AFP PHOTO / SAKIS MITROLIDIS (Photo credit should read SAKIS MITROLIDIS/AFP/Getty Images)
Foreign anti-EU activists protest in front of the Greek parliament in Athens, during a demonstration calling for 'NO' at referendum and for Greece's exit from the eurozone on June 28, 2015. Greek Prime Minister Alexis Tsipras stunned Europe late Friday with a surprise call for a July 5 referendum on the latest cash-for-reforms package and advised voters against backing a deal that he said spelled further 'humiliation'..AFP PHOTO / LOUISA GOULIAMAKI (Photo credit should read LOUISA GOULIAMAKI/AFP/Getty Images)
ATHENS, GREECE - JUNE 28: People wait in a queue in front of a bank's ATM to withdraw their cash in Athens, Greece on June 28, 2015. Greeks are anxious about whether the European Central Bank will increase the emergency liquidity assistance, banks can draw on from the country's central bank or not. (Photo by Ayhan Mehmet/Anadolu Agency/Getty Images)
ATHENS, GREECE - JUNE 21: Protesters attend an anti-austerity pro-government rally in front of the parliament building on June 21, 2015 in Athens, Greece. Greece's leftwing government believes it can reach a deal with its creditors on Monday. (Photo by Milos Bicanski/Getty Images)
ATHENS, GREECE - JUNE 21: Greek Presidential Guard conducts his ceremonial march as protesters attend an anti-austerity pro-government rally in front of the parliament building on June 21, 2015 in Athens, Greece. Greece's leftwing government believes it can reach a deal with its creditors on Monday. (Photo by Milos Bicanski/Getty Images)
ATHENS, GREECE - JUNE 21: Protesters attend an anti-austerity pro-government rally in front of the parliament building in Athens, Greece, June 21, 2015. Greece's leftwing government believes it can reach a deal with its creditors on Monday. (Photo by Milos Bicanski/Getty Images)
ATHENS, GREECE - JUNE 3: A Greek flag billows in the wind on the Acropolis Hill on June 3, 2015, in Athens, Greece. Greek Prime Minister Alexis Tsipras is expected to be presented with the international creditors' plan of tough economic reforms for Greece in order to unlock 7.2 billion Euros of rescue loans later today. It is unclear whether Greece will accept the offer, as Tsipras has previously called for his own proposals to be considered by the creditors (Photo by Milos Bicanski/Getty Images)
ATHENS, GREECE - JUNE 15: View of the index in the Hellenic Exchange office on June 15, 2015 in Athens, Greece. The European Commission has said that Greece and its international creditors need to come to an agreement within the next 2 weeks to avoid a possible default, after weekend talks collapsed. (Photo by Milos Bicanski/Getty Images)
ATHENS, GREECE - JUNE 15:.Woman pass by Hellenic Exchange office in Athens on June 15, 2015 in Athens, Greece. The European Commission has said that Greece and its international creditors need to come to an agreement within the next 2 weeks to avoid a possible default, after weekend talks collapsed. (Photo by Milos Bicanski/Getty Images))
ATHENS, GREECE - JUNE 15: View of the index in the Hellenic Exchange office on June 15, 2015 in Athens, Greece. The European Commission has said that Greece and its international creditors need to come to an agreement within the next 2 weeks to avoid a possible default, after weekend talks collapsed. (Photo by Milos Bicanski/Getty Images)
A woman walks past Bank of Greece headquarters in central Athens on June 15, 2015. Athens will patiently wait until its creditors become realistic, Greece's premier said, a day after last-ditch talks between the two sides collapsed and raised fears that Athens would default and exit the eurozone. AFP PHOTO/ LOUISA GOULIAMAKI (Photo credit should read LOUISA GOULIAMAKI/AFP/Getty Images)
ATHENS, GREECE - JUNE 15: Locals visit the Green market on June 15 2015 in Athens, Greece. The European Commission has said that Greece and its international creditors need to come to an agreement within the next 2 weeks to avoid a possible default, after weekend talks collapsed. (Photo by Milos Bicanski/Getty Images)
ATHENS, GREECE - JUNE 15: Pensioners play backgammon in front of closed shop on June 15, 2015 in Athens, Greece. The European Commission has said that Greece and its international creditors need to come to an agreement within the next 2 weeks to avoid a possible default, after weekend talks collapsed. (Photo by Milos Bicanski/Getty Images)
ATHENS, GREECE - JUNE 15: Women buy on cheep clothing at a flea market on June 15 2015 in Athens, Greece. The European Commission has said that Greece and its international creditors need to come to an agreement within the next 2 weeks to avoid a possible default, after weekend talks collapsed. (Photo by Milos Bicanski/Getty Images)
A man walks past graffiti featuring the word 'Time' but using the Euro sign in place of the letter 'e'on a wall in Athens on June 15, 2015. Greek Prime Minister Alexis Tsipras insisted in an oped piece in a Greek newspaper on June 15, 2015 that Athens would 'wait patiently' until the International Monetary Fund and the European Union became 'more realistic', a day after last-ditch talks between the two sides collapsed, bringing the threat of a Greek exit from the euro closer than ever. AFP PHOTO/ LOUISA GOULIAMAKI (Photo credit should read LOUISA GOULIAMAKI/AFP/Getty Images)
An elderly men stands outside the Athens central market on June 15, 2015. Athens will patiently wait until its creditors become realistic, Greece's premier said, a day after last-ditch talks between the two sides collapsed and raised fears that Athens would default and exit the eurozone. AFP PHOTO/ Louisa Gouliamaki (Photo credit should read LOUISA GOULIAMAKI/AFP/Getty Images)
ATHENS, GREECE - JUNE 15: Local people pass by graffiti that says 'Greece vs Everybody' on June 15, 2015 in Athens, Greece. The European Commission has said that Greece and its international creditors need to come to an agreement within the next 2 weeks to avoid a possible default, after weekend talks collapsed. (Photo by Milos Bicanski/Getty Images)
People read newspaper's headlines in central Athens on June 15, 2015. Athens will patiently wait until its creditors become realistic, Greece's premier said, a day after last-ditch talks between the two sides collapsed and raised fears that Athens would default and exit the eurozone. AFP PHOTO/ Louisa Gouliamaki (Photo credit should read LOUISA GOULIAMAKI/AFP/Getty Images)
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GERMAN SCEPTICISM

EU officials hope the bailout deal will be in place by mid-August when Greece needs to make new payments to the European Central Bank to redeem its maturing debt. A 7.16 billion euro bridge financing is enough to see Athens through July - including a July 20 ECB repayment - but not through August.

German Economy Minister Sigmar Gabriel said this deal could succeed where previous ones failed because the European Union now emphasises growth and investment rather than just austerity.

It would depend on reforms being enacted and "convincing the population that this is a path that allows Greece to assert itself rather than becoming a permanent alms-receiver," he said in extracts from a television interview.

French President Francois Hollande, who pushed hard for a deal, said the Greek crisis had weakened Europeans' faith in the European project.

"What threatens us is not an excess of Europe but its insufficiency," he wrote in an op-ed in the Journal du Dimanche newspaper, reiterating calls for the creation of a euro zonegovernment.

Gabriel rejected accusations Germany had been too hard on Athens and criticised Finance Minister Wolfgang Schaeuble for suggesting Greece could quit the euro zone temporarily.

But in a sign of the challenge for euro zone leaders to convince their electorates of the merits of the deal, more than half of Germans think the planned deal with Greece is bad and many would have preferred it left the euro zone, a YouGov survey seen by German newspaper Welt am Sonntag showed.

European Commission Vice President Valdis Dombrovskis called on the Greek parliament to pass laws on reforms "very quickly," in an interview due to be published in German newspaper Bild on Monday. He said negotiations on a third bailout for Greece would take several weeks, according to comments released ahead of publication.

Dombrovskis defended the decision to grant Greece bridge financing even though the Greek parliament had not yet passed its whole reform program, saying that the funds were important to prevent the country from sliding into insolvency and had only been granted once the Greek parliament had passed some reforms.

But he warned that the EU would "in the worst case scenario" hold off paying funds toGreece from the EU budget if Greece broke agreements and did not pay back the emergency loan. He said a Greek exit from the euro zone "is not on our agenda," but Athens needed to stick to its agreements and carry out reforms in return for solidarity.

(Additional reporting by Michelle Martin in Berlin; Writing by Ingrid Melander; Editing byPhilippa Fletcher, Ralph Boulton and Nick Zieminski)



Greece: 'A Solution Has to Be Found'

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