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01-05-2015, 04:37 PM
Greek debt crisis: euro exit panic as pensioners start bank run
BRUNO WATERFIELD THE TIMES MAY 01, 2015 9:33AM
Athens pensioners wait outside the National Bank of Greece to get their monthly payments. Source: AFP
Panicking pensioners queued at banks, raided their accounts and broke into a board meeting of the state pension fund as Greece struggled to pay its two million pension recipients.
Officials claimed that a “technical hitch” had delayed some payments as Greece braced itself to run out of money in days without a breakthrough from secret talks in Brussels.
The left-wing government in Athens indicated that it would still resist the economic reforms demanded by its creditors in return for more loans.
“My answer is simple: no, no, no,” said Yanis Varoufakis, the finance minister, before the talks. A majority of investors, analysts and traders responding to a Bloomberg survey said that they expected Greece to leave the single currency.
Elderly Athenians yesterday queued at branches of the National Bank of Greece, which pays out most state pensions - staggered over several days - after the country’s main social security fund delayed payments because of cash shortfalls.
Greece will have to declare that it is bankrupt if it has to repay 700 million euros ($993m) to the IMF on May 12 without first securing the eurozone’s agreement to unlock 7.2 billion euros in loans. An earlier payment of 200 million euros to the IMF is due on Wednesday.
“Greece has warned that it faces financial asphyxiation without a deal and wants the European Central Bank to ease restrictions on the Greek treasury,” an EU official said. “For that to happen, the Greek government must compromise on its so-called red lines this weekend.”
The country’s state pension funds almost defaulted after a shortfall of “several hundred million euros” delayed payments to pensioners this week. Many people panicked when they discovered that their pension payments were not in their accounts.
“Normally I only withdraw half the money at the end of the month but today I’m taking it all,” said Sotiria Zlatini, 75, a former civil servant. “There are so many rumours going round.”
In a sign of public discontent, pensioners broke into a board meeting of the state pension fund demanding that it stop transferring cash reserves to the government under an emergency decree to keep the country solvent.
Greece has been forced to rely on its own funds since last August because of a row with the eurozone countries. In a desperate attempt to stave off a cash crunch, a government decree ordered 1500 state entities, including the pension fund, local authorities, hospitals and universities, to hand over their cash reserves to the central bank. Some of the public bodies have been reluctant to lose control of their funds and have deliberately delayed cash transfers.
A new team of Greek negotiators began talks yesterday (Thursday) with officials from the IMF and the eurozone. The negotiations are expected to continue throughout the bank holiday weekend.
Alexis Tsipras, the Greek prime minister, is overseeing the talks after the eurozone forced him to remove Mr Varoufakis from the negotiating team.
A deal looked impossible yesterday as Syriza party left-wingers forced Mr Tsipras to block earlier plans to appease eurozone countries. “The government is sticking to its red lines,” a spokesman for Mr Tsipras said.
Greece’s credit rating has been cut further into “junk” status as the risk of default and exit from the euro is “rising”, according to Moody’s. The ratings agency warned that should negotiations fail, “the outcome is likely to be a disorganised default”.
The head of the eurozone group of finance ministers said yesterday that Europe was ready for any outcome to the stand-off between Greece and its creditors.
Asked if there was a plan B in case Greece defaulted or was forced out of the eurozone, Jeroen Dijsselbloem said: “Is the eurozone prepared for eventualities, the answer to that is, ‘yes’.”
Additional reporting: Philip Aldrick
The Times
BRUNO WATERFIELD THE TIMES MAY 01, 2015 9:33AM
Athens pensioners wait outside the National Bank of Greece to get their monthly payments. Source: AFP
Panicking pensioners queued at banks, raided their accounts and broke into a board meeting of the state pension fund as Greece struggled to pay its two million pension recipients.
Officials claimed that a “technical hitch” had delayed some payments as Greece braced itself to run out of money in days without a breakthrough from secret talks in Brussels.
The left-wing government in Athens indicated that it would still resist the economic reforms demanded by its creditors in return for more loans.
“My answer is simple: no, no, no,” said Yanis Varoufakis, the finance minister, before the talks. A majority of investors, analysts and traders responding to a Bloomberg survey said that they expected Greece to leave the single currency.
Elderly Athenians yesterday queued at branches of the National Bank of Greece, which pays out most state pensions - staggered over several days - after the country’s main social security fund delayed payments because of cash shortfalls.
Greece will have to declare that it is bankrupt if it has to repay 700 million euros ($993m) to the IMF on May 12 without first securing the eurozone’s agreement to unlock 7.2 billion euros in loans. An earlier payment of 200 million euros to the IMF is due on Wednesday.
“Greece has warned that it faces financial asphyxiation without a deal and wants the European Central Bank to ease restrictions on the Greek treasury,” an EU official said. “For that to happen, the Greek government must compromise on its so-called red lines this weekend.”
The country’s state pension funds almost defaulted after a shortfall of “several hundred million euros” delayed payments to pensioners this week. Many people panicked when they discovered that their pension payments were not in their accounts.
“Normally I only withdraw half the money at the end of the month but today I’m taking it all,” said Sotiria Zlatini, 75, a former civil servant. “There are so many rumours going round.”
In a sign of public discontent, pensioners broke into a board meeting of the state pension fund demanding that it stop transferring cash reserves to the government under an emergency decree to keep the country solvent.
Greece has been forced to rely on its own funds since last August because of a row with the eurozone countries. In a desperate attempt to stave off a cash crunch, a government decree ordered 1500 state entities, including the pension fund, local authorities, hospitals and universities, to hand over their cash reserves to the central bank. Some of the public bodies have been reluctant to lose control of their funds and have deliberately delayed cash transfers.
A new team of Greek negotiators began talks yesterday (Thursday) with officials from the IMF and the eurozone. The negotiations are expected to continue throughout the bank holiday weekend.
Alexis Tsipras, the Greek prime minister, is overseeing the talks after the eurozone forced him to remove Mr Varoufakis from the negotiating team.
A deal looked impossible yesterday as Syriza party left-wingers forced Mr Tsipras to block earlier plans to appease eurozone countries. “The government is sticking to its red lines,” a spokesman for Mr Tsipras said.
Greece’s credit rating has been cut further into “junk” status as the risk of default and exit from the euro is “rising”, according to Moody’s. The ratings agency warned that should negotiations fail, “the outcome is likely to be a disorganised default”.
The head of the eurozone group of finance ministers said yesterday that Europe was ready for any outcome to the stand-off between Greece and its creditors.
Asked if there was a plan B in case Greece defaulted or was forced out of the eurozone, Jeroen Dijsselbloem said: “Is the eurozone prepared for eventualities, the answer to that is, ‘yes’.”
Additional reporting: Philip Aldrick
The Times