The Greek banking system has just four days of cash guaranteed, according to Louka Katseli, head of Greece’s banking association.
According to Reuters, Katseli said “We know that everything is secured until Monday” on Skai TV on Thursday morning.
Greek banks were initially shuttered for the week of the referendum. That was meant to last until Tuesday July 7, but closures have been extended until at least next week.
The capital controls in place mean that ordinary Greeks can only withdraw €60 ($US66.62 or £43.24) from ATMs each day. A report a week ago suggested that the country’s banks had just €500 million in physical cash left.
Companies which rely on online banking transfers to outside the country to operate have also been effectively shuttered by the move.
In all likelihood, without an immediate deal and the resumption of considerably larger Emergency Liquidity Assistance (ELA) from the European Central Bank (ECB), banks will stay closed.
Though €60 per day is enough for many Greeks, since the average salary is lower than that, there have been suggestions that a prolonged crisis will mean cutting the level further. Here’s what Morgan Stanley analysts had to say in a note about the issue (emphasis ours):
Regarding liquidity provision to the Greek banking system, we expect the ECB to keep ELA unchanged at the current level in order to not pre-empt any political decisions in these crucial days for the future of the euro. As a result, the Greek banks will likely stay closed for the moment and the liquidity crunch could intensify, potentially causing the daily cap for ATM withdrawals to be reduced.
Meanwhile, the Greek government has submitted a reform programme and a request for a 3-year bailout to the European Stability Mechanism (ESM), more commonly known as the bailout fund.
We’re yet to get much of a reaction from other European leaders to the Greek offer — if it’s not good enough, as had been the case with every offer up to now, Athens really has very little time to propose something else before its banks are completely exhausted.
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