Greece’s government shuttered banks and placed a €60 (£42.30, $US66.40) daily cash withdrawal limit for citizens at the end of June, after announcing plans for a referendum on July 5.
Although capital controls were only meant to restrict citizens’ financial movements for a week, Prime Minister Alexis Tsipras dropped a massive hint last night that banks could remain shut for another month.
“The reopening of the banks depends on the sanctioning of the deal, which will take place in a month,” said Tsipras in an interview on public Greek television ERT, cited by the Telegraph.
He also added that the government still hopes that the European Central Bank would raise the level of emergency liquidity assistance for the banks after it announced that it would keep the facility frozen at €89 billion (£63 billion, $US98 billion) this week.
Greece’s economy is increasingly falling further into an abyss and the government has to enforce strict capital controls to stop the country’s banks being bled dry. Bank closures and ATM restrictions have already caused crazy, long queues and pensioners crying in the streets.
The referendum put the country in a worse financial position than it was at the start of the bailout process, when it asked for €240 billion (£171 billion, $US265 billion) back in 2010. This is because the referendum stalled talks, led to Greece defaulting on a €1.6 billion (£1.1 billion, $US1.8 billion) payment on June 30, and ravaged its credibility and credit ratings.
It has now signed up to a deal that is far worse and more austere on what the nation voted “No” on. Not only has the Syriza-led government agreed to a number of extremely austere measures, it’s also being forced to chop up and sell parts of the country to the private sector so it can recapitalise the battered banking sector.
Last week, it was reported that Greece’s banks were down to their last €500 million (£356 million, $US553 million). This is barely enough to keep the financial system going.
To make matters worse, Greece defaulted on another International Monetary Fund debt payment again last night, worth €450 million (£316 million, $US495 million).Greece has to clear its arrears payments before it can receive more bailout money.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.