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On brink of default, Greece imposes cash crunch

The Greek government closed all banks and made ready to default on a major debt payment after bailout talks with international creditors collapsed over the weekend. Greeks lined up at ATMS and rushed to gas stations, but were met with limits to prevent a full-on run on the banks. Special correspondent Malcolm Brabant reports from Athens.

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    Shock and anxiety spread across Greece today, as banks and the Athens stock market began a week-long closure.

    "NewsHour" special correspondent Malcolm Brabant is in Athens, where many are uncertain about what will happen to them, and to their country, as tomorrow's default deadline will almost certainly pass without a solution.


    Across Athens this morning, people lined up at ATMs, hoping to get at their money. Instead, they were limited to withdrawals of just 60 euros, or $67.

  • BARBA SOTIRIS, Greece (through translator):

    The banks are closed. Everything's closed. There's nothing there. I have just got one euro 60 in my pocket. I went to the bank to get some money and there was nothing but fresh air.


    The bank closure came after weekend talks between Greece and its international creditors collapsed in acrimony. Greek Prime Minister Alexis Tsipras rejected new austerity measures as the price for additional bailout funds. Instead, he called a national referendum for this coming Sunday.

  • PRESIDENT ALEXIS TSIPRAS, Greek Prime Minister (through interpreter):

    Greek men and women, the blackmail ultimatum is for us to accept degrading austerity without end, and without the prospect of ever recovering socially and economically. I invite you to decide in a sovereign and proud manner, as the history of the Greeks commands.


    With that, the European Central Bank cut off emergency funding to Greek banks. So, the Tsipras government imposed currency curbs to head off a full-scale run on the banks. Many Greeks responded by rushing to gas stations, some of which put up signs saying they wouldn't accept credit cards. The cash crunch also hit pensioners, who'd been due to receive payments today.

  • WOMAN (through interpreter):

    We are waiting for our pensions, the labors that we have been paying for our whole life. And they are fooling us, and we are waiting here like beggars to withdraw our own money. The TV channels are now saying one thing, and in an hour they say something else. They are driving us crazy, everyone.


    That complaint was echoed at places like this coffee shop in the middle-class Athenian suburb of Pallini.


    I think it's just uncertainty. People are just uncertain. We don't know what's going to happen next week. So, if we knew, if we had an example, if somebody would tell us what the week after would be like, then everybody would be a bit more relaxed. So, it's that uncertainty, and uncertainty, I suppose, fuels fears. So people are scared. You know, will I have a job next week? Will the banks open next week? I don't know.


    And it wasn't only Greeks themselves affected by the crisis. One of the only bright spots in the nation's economy is its tourism industry, but foreign visitors today expressed mixed feelings.


    Right now, a lot of people in Europe, they are afraid to come here to get — let's say to spend some vacation. My advice to the tourists from Europe is to come here with their own money in their pocket already, so they don't have any problems.


    In the meantime, the Greek government is headed for default tomorrow on a major debt repayment, and, possibly, for an exit from the Eurozone.

    Today in Brussels, the head of the E.U. Commission appealed for clear thinking ahead of Sunday's referendum.

  • JEAN-CLAUDE JUNCKER, President, European Commission (through interpreter):

    I very much like the Greeks, and I would say to them you shouldn't commit suicide because you are afraid of death. You should say yes, because the Greek people who are responsible, honorable citizens and proud of themselves and their country should say yes to Europe. Greece is Europe. Europe is Greece.


    But back in Athens, as night fell, thousands of protesters gathered outside Greece's Parliament to demand the government stand firm against any new austerity measures.

    Greece is in uncharted waters, but it could be sinking more rapidly than people realize. A limited number of banks had been due to open tomorrow to allow the country's old-age pensioners to cash their monthly checks. But the strain on the banking system is so great that that has now been put back to either Wednesday or Thursday. And there will be considerable anger if the country's most vulnerable people can't access their money.

    As the situation stands right now, there are less than 24 hours to go before the end of the international bailout fund which is keeping Greece afloat. Athens doesn't have the $1.8 billion it needs to repay the International Monetary Fund. So, at this time tomorrow tonight, Greece will be in default. And after that, life will be much more uncertain — Judy.

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