Greece moves to block bank run, as crisis grows

Photo: Lealy_11

Greece has taken steps to block a severe run on its banks, as the economic crisis grows.

Last Friday, Prime Minister Alexis Tsipras called for an unprecedented referendum on the country's bailout negotiations. After failing to reach an agreement to secure additional funds, Tsipras announced that the EU creditors' lists of demands would be put to the public vote to decide whether or not the terms would be accepted.

The move arrives ahead of Tuesday's deadline for a €1.6 billion payment to the IMF, which, if not met, would see the country default. Tsipras has asked for the deadline to be extended until after the referendum on Sunday 5th July, but the request has been denied.

As the possibility of a default looms, depositors are now expected to take as much money as possible from their accounts. To prevent a run on the banks, in the vein of the recent Cypriot crisis, Greece has shut all of its banks this week. They will remain shut until after the referendum.

Withdrawals from cash machines have also been limited to €60, although the PM reassured people that wages and pensions would not be affected by the new restrictions.

There are no limits on cash withdrawals for tourists, though, according to the Association of British Travel Agents. Indeed, the tourism sector contributes a significant amount to the Greek economy, which will need foreign tourist spending more than ever in the coming months.

The ABTA advises all travellers heading to Greece to take enough Euros in cash to cover all of their needs. Other payment methods such as credit and debit cards are accepted as normal in shops and restaurants.

In the event of Greece leaving the euro altogether, the ABTA notes that "any changes would be highly unlikely to happen overnight, any switch to a new currency would take time and Euros would likely be accepted in the interim".