Greece to close banks, stock market to head off economic collapse

The strongest signs yet of a possible economic collapse came out of Greece Sunday as the government announced banks and the stock market will be closed Monday, and capital controls will be in place to limit massive money withdrawals. For more on the situation, Elena Becatoros of the Associated Press joins Hari Sreenivasan via Skype from Athens.

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    We're joined now by Elena Becatoros via Skype. She is the bureau chief for The Associated Press in Athens.

    So, what does this mean, that the banks and the stock market are closed tomorrow?


    The banks and the stock market will be closed tomorrow and restrictions will be placed on how much money Greeks can withdraw their bank accounts using ATM machines. The prime minister announced it in a televised address. He said it came after a recommendation by the Bank of Greece.

    What he didn't say is exactly how long the banks will remain closed and how much the banking transactions will be restricted.

    A few banking sources have told us that they — the banks will probably be shut for several days, probably the entire week.


    All right. So, if all these banks are shut, that means commerce grinds to a halt. I mean, how do you pay for your groceries or how do the grocers pay their suppliers?


    It's very unclear at the moment exactly what credit capital controls will be in place. It's not clear what kind of transactions will be allowed, whether electronic bank transfers will be allowed. Whether people can pay their bills or not, nobody actually has been told this at the moment.


    There's also a gap here. On Tuesday is when Greek is essentially set to default on its first massive loan payment, but the government or the parliament has approved a referendum that won't happen 'til next Sunday.


    Yes, indeed. And the prime minister said tonight that he has renewed his requests for the bailout to be extended until the referendum is held. He even made the same request over the weekend, earlier this weekend. And it was rejected by the Eurogroup, which is the other 18 finance ministers of the Eurozone.

    So, so far, that hasn't been accepted and Prime Minister Alexis Tsipras said tonight that he has renewed that request. It remains to be seen whether that will be approved.


    And we also see that the European commission, the bankers actually publicized the deal that's on the table, kind of in an effort to show how far they've come to make Greek solvent.


    Yes, indeed. The referendum, the way that it's been called at the moment has been the government is advocating a no vote and they are saying that it is on the creditors' proposals.

    The problem is that so far, until the commission actually publicized this document, there hadn't been an officially released document of what exactly this proposal was.

    It was all in the form of leaks to the press from meetings in Brussels.

    And it also hasn't been translated in Greek. So there might be an issue with that when Greeks are being asked to vote on a proposal that many of them, if they don't speak English, haven't been able to read yet.


    So, what do you see happening here in the next week? I mean, we've been talking about this for four years, five years now.


    I have to be honest. It was very unclear. I'm not sure anybody knows exactly how this is going to play out.

    There are several scenarios from the more reasonable to the more outlandish, but if there's one thing this crisis has taught us is to expect the unexpected.

    It remains to be seen how this will play out. The chances of Greece not paying its debt on its due on Tuesday, which is 1.6 billion euros, is at this stage pretty high.


    All right. Elena Becatoros joining us via Skype, The Associated Press bureau chief in Athens — thanks so much.


    Thank you.

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