Greece prepares to reopen Athens stock market

ATHENS, Greece - The Athens stock exchange, which has been closed for nearly a month due to Greece's debt crisis, is expected to reopen in a few days after receiving approval from the European Central Bank, a stock market source told AFP Tuesday.

"The ECB gave its green light to reopen the stock market in Greece, (and) we are waiting for a ministerial decision which will specify the conditions of the reopening," the source said.

A spokesman for the Greek finance ministry said that a decision would be published later Tuesday but did not indicate when the Athens stock exchange would resume trading.

The stock market in the Greek capital closed on Friday June 26, a few hours before Prime Minister Alexis Tsipras announced a referendum on the bailout conditions demanded by Greece's international creditors.

Greeks rushed to their banks' cash machines over that weekend prompting the government to impose capital controls from Monday June 29, followed by the closing of the banks and the stock exchange.

The aim was to protect the banking sector which has seen huge withdrawals over the past six months by people nervous about Greece's economic and financial future.

The banks reopened after three weeks on July 20, but withdrawals and money transfers abroad remain under tight controls. Greeks can only withdraw up to 420 euros ($464) a week.

For businesses the capital controls were slightly eased last week but economic activity especially imports continues to encounter numerous obstacles.

source: www.abs-cbnnews.com

Banks reopen, taxes rise as Greece pays billions to creditors

ATHENS, Greece - Greece's government hiked taxes and paid billions of euros to its creditors on Monday, as banks reopened just days after the debt-laden country reached a reforms-for-cash deal with its European partners.

Greeks woke up to widespread tax rises -- on everything from sugar and cocoa to condoms, taxis and funerals -- as part of the tough reform package agreed last week in exchange for a three-year bailout of up to 86 billion euros ($93 billion) aimed at keeping Greece from crashing out of the eurozone.

The nation's banks were thronged with customers after a three-week shutdown estimated to have cost the economy 3.0 billion euros. The banks were ordered to close on June 29 to prevent mass cash withdrawals that could have caused the financial system to collapse.

Banks are continuing to offer only limited services -- with a ban on most transfers to foreign banks among the capital control measures still in place -- but a daily cash withdrawal limit of 60 euros ($65) has been relaxed.

Bank tellers were dealing with a hectic stream of customers, many expressing frustration over continuing restrictions on financial services.

"I came today to collect my pension but unfortunately I could only get a small percentage of it," said Spyros Papasotiriou as he left his bank in the northern Athens suburb of Neo Psychiko. "It's a big hassle."

A source close to the Greek finance ministry meanwhile confirmed that the government had completed payments of billions of euros that were due to the European Central Bank and International Monetary Fund on Monday, after the EU granted emergency bridge funding of 7.16 billion euros.

The IMF separately announced that Greece was no longer in default on its loans after remitting about two billion euros ($2.2 billion) to make up for missed repayments, while an ECB spokesperson said: "The ECB confirms it has been repaid."

Value-added tax (VAT) has gone up from 13 percent to 23 percent on a wide range of goods and services, although the tax on medicines, books and newspapers eased from 6.5 percent to 6.0 percent.

Tryphon Alexiadis, the new finance vice minister in charge of tax, vowed that "not a single euro from the tax rise will escape state coffers", adding that "a wave of inspections will be launched" to prevent tax evasion in a country where the problem is notoriously rife.

Along with the tax hikes, the Greek government -- led by the radical-left Syriza party that came to power in January promising to end austerity -- is also set to overhaul its ailing pension system as part of the reforms deal, and launch privatisations it had previously opposed.

'Crash test'

Louka Katseli, the head of Greece's bank association, said some 40 billion euros have been withdrawn from Greek banks since December by customers anxious over the safety of their deposits, seriously damaging the banks' ability to function normally.

She urged people to bring their savings back to the banks to support the crisis-hit financial system.

"If we take out the money from our safes and our houses -- where, in any case, it isn't safe -- and we deposit it in the banks, we will reinforce liquidity," she told the Mega TV channel.

Greeks are now able to withdraw a maximum of 300 euros at once until Friday, when a new weekly limit of 420 euros takes effect.

They can also use their credit cards for foreign purchases again, and certain exceptions to the capital controls have been introduced to help Greeks who are studying or undergoing medical treatment abroad.

But most people remain unable to take out large sums, transfer money to other countries or open new bank accounts.

The capital controls are taking a heavy toll on Greek businesses, with 23 percent of firms saying they are seeking to move their headquarters abroad to improve stability and cash-flow, according to a survey released Monday by non-profit group Endeavour Greece.

The austerity package caused a mutiny among lawmakers of Prime Minister Alexis Tsipras's ruling Syriza party -- forcing him to carry out a limited cabinet reshuffle on Friday -- and he faces a fresh challenge on Wednesday when parliament must approve a second wave of reforms tied to the rescue package.

Pro-government newspaper Avgi said the vote would be a "crash test" that could even result in Tsipras's resignation.

"If there are new losses, in whatever form, (Tsipras) will hand back his mandate," the daily said.

Analysts have said the divisions within the ruling party could force early elections.

Government spokeswoman Olga Gerovassili ruled out another vote while Athens was still negotiating the bailout.

"Elections are not useful at the moment and the government has no intention of organising any," Gerovassili told state news agency ANA.

"The goal is to finalise the deal (with Europe) and restore normality and stability," she said.

source: www.abs-cbnnews.com

Greece votes in referendum with future in euro in doubt

ATHENS - Greece votes on Sunday on whether to accept more austerity in exchange for international aid, in a high-stakes referendum likely to determine whether it leaves the euro-currency area after seven years of economic pain.

Staged against a backdrop of shuttered banks and threats of financial apocalypse, the vote is too close to call and may not produce the clear mandate for negotiations that Athens' creditors seek.

Greeks are split on whether to accept an offer by creditors that Prime Minister Alexis Tsipras calls a "humiliation" and is urging people to reject. Investors and European policymakers say a rejection would set Greece on a path out of the euro, destabilizing the global economy and financial markets.

"On Sunday we should all send a message of democracy and dignity to the world," Tsipras told tens of thousands of Greeks rallying for a 'no' vote before campaigning ended.

Voting on whether to accept more taxes and pension cuts would be divisive in any nation, even at the best of times.

In Greece, the choice is faced by an angry and exhausted population who, after five years of crippling austerity, have now suffered through a week of capital controls imposed to prevent the collapse of the nation's financial system.

Pensioners besieging bank gates to claim their retirement benefits, only to leave empty-handed and in tears, have become a symbol of the nation's dramatic fall over the past decade.

Eleven years ago, in the early morning of July 5, 2004, Greeks poured into the streets, united in celebration of their country's victory in the European Cup soccer tournament. Today, Greece is divided -- and scared -- as rarely before.

"There is an atmosphere of fear. You can just feel it," said Sarafianos Giorgos, a 60-year-old teacher in Athens, who says he will vote in favour of the creditors' proposals.

Polls open at 7 a.m. local (0400 GMT) and shut at 7 p.m, with the first official projection of the result expected at 9 p.m.

Four opinion polls published on Friday showed the 'Yes' vote marginally ahead. A fifth put the 'No' camp 0.5 percentage points in front. All were well within the margin of error.

Anxious Greeks rallying for a 'Yes' vote agree Greece has been handed a raw deal but say the alternative, a collapse of the banks and a return of the old drachma currency, would be worse.

Those pledging to deliver a rousing 'No' to tax hikes and pension cuts in return for more loans say Greece cannot afford more of the austerity that has left one in four without a job. They agree with Tsipras that Europe is "blackmailing" Greece.

"As a Greek woman, I am embarrassed at those who are going to vote 'Yes' for fear of leaving the euro. They are asking us to accept unending slavery. I am offended," said Tenekidou Ermioni, a 54-year-old teacher.

NIGHTMARE RESULT

Greeks are likely to face more financial and political turmoil in the days and weeks ahead.

"All in all, Prime Minister Alexis Tispras' early exit from office is still more likely than Grexit," wrote Wolfgang Piccoli of Teneo Intelligence.

"Regardless of Sunday's result, significant levels of political volatility are here to stay."

Finance Minister Yanis Varoufakis promised Greeks on the eve of the vote that European creditors would immediately have to grant Athens better terms, including massive debt relief and less austerity, if they voted 'No'. EU ministers and officials have warned that his pledge is a cruel illusion.

If Greeks vote 'Yes' to the bailout, both Tsipras and Varoufakis are expected to resign -- triggering a new chapter of uncertainty as political parties try to cobble together a national unity government to keep talks with lenders going until elections are held.

European creditors have said a 'Yes' vote will resurrect hopes of aid to Greece. But capital controls, and default last week to the IMF, have undermined Greece's economic standing and creditworthiness, so a new bailout package would probably entail harsher terms than those on offer even last week.

A 'No' vote would bring even greater uncertainty, and the prospect of a sudden financial collapse.

European policymakers have openly warned such a result would be read as a rejection of talks with creditors and the euro, leaving Greece to fend for itself without any realistic prospect of funds to avoid bankruptcy.

Much would depend on the European Central Bank, which will review on Monday morning its policy on emergency liquidity, which Greek lenders rely on.

The ECB could decide to freeze the liquidity or cut it off altogether if Greeks vote 'No', or if Athens subsequently defaults on a bond redemption to the ECB on July 20.

There is concern that an inconclusive result might sow further confusion, and possibly lead to violent protests, rather than sending a clear signal about Greek intentions.

"The nightmare result would be 51-49 percent in either direction," a senior German official said. "And the chances of this are not insignificant."

(Additional reporting by Noah Barkin in Berlin and Lefteris Karagiannopoulos; Writing by Deepa Babington; Editing by Alessandra Galloni and Andrew Roche)

source: www.abs-cbnnews.com