Greece faces banking collapse as ATMs run dry

ATHENS: Greece weighed drastic banking restrictions to stave off a financial collapse on Sunday as anxious Greeks emptied cash machines amid fears that banks will be closed this week.
Long queues of up to a hundred people formed outside some ATMs in Athens as fears mounted that Greece will be forced to implement capital controls that would restrict withdrawals from its stricken banking system.
“There is a fear that tomorrow, banks will not open, so I take money for the rent and the daily expenses,” said a woman, waiting in a line in Athens, who declined to give her name.Alarm spread after the dramatic breakdown of bailout talks between Athens and its creditors over the weekend and a decision on Sunday by the European Central Bank not to increase its financial support to the Greek banks.
Greek Finance Minister Yanis Varoufakis and the Greek central bank chief met on Sunday afternoon for an emergency session of the “systemic stability council” as the crisis-weary country prepared for the worst.
Asked about capital controls in a BBC interview, he replied: “This is a matter that we’ll have to work overnight on with the appropriate authorities both here in Greece and in Frankfurt.”Since Friday night alone, 1.3 billion euros have been withdrawn from the Greek banking system, according to the head of the bank workers’ union Stavros Koukos.
A banking source in Greece said only 40 percent of cash machines now had money in them and a host of European governments advised citizens travelling to Greece to carry money with them. “It is a dark hour for Europe as far as I’m concerned,” warned Varoufakis.
The Frankfurt-based ECB’s governing council earlier held an emergency telephone conference and pledged to maintain emergency liquidity assistance — keeping open its life-support for Greek banks and, by extension, the Greek state.
But it pledged no extra cash for banks amid signs a bank run was gathering pace.The long festering crisis took a sharp turn for the worse on Friday night after months ofbetween the new hard-left government of Prime Minister Alexis Tsipras and the country´s creditors.
The two sides have been at odds over the economic reforms demanded by the creditors in exchange for fresh cash needed to keep the Greek state afloat.Tsipras stunned Europe on Friday night 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”.
For Tsipras, austerity has been a “humanitarian catastrophe” for his country of about 11 million people, which has endured five years of recession, turmoil and skyrocketing unemployment.