Greek banks to open amid new taxes

Anti-austerity protests have increased on the streets of Athens in the past few weeks [Xinhua]

Anti-austerity protests have increased on the streets of Athens in the past few weeks [Xinhua]

Although Greek banks are set to reopen today after a three-week closure, limitations on transactions will stay in place.

Greek banking authorities said that the $70 withdrawal limit will stay in place, but they hoped that the country will now have overcome a critical stage and is slowly edging toward fiscal “normality”.

The reopening of financial institutions comes after last week’s Greek parliament vote to accept austerity measures demanded by European creditors.

But Greece still teeters too close to fiscal collapse, some in Europe have warned.

During a national television interview, German Chancellor Angela Merkel called on the Greek Parliament to quickly push through fiscal reforms in order to prop up the economy and allow greater debt relief in the future.

Among these reforms are Greek pledges to increase value-added taxes, slash pensions, and liqueify state assets.

An increase in value added tax on restaurant food and public transport is expected to go into effect today, Monday.

But the new bailout package – set to the tune of $88 billion – along with its harsher austerity requirements has been unpopular throughout the Eurozone.

In Greece, the backlash against the deal – a less harsh austerity package was rejected by referendum just two weeks ago – has been so severe that Prime Minister Alexis Tsipras was forced to sack a number of ‘rejectionist’ ministers within his own cabinet.

On Sunday, German demonstrators took to the street to protest what they said was Merkel’s soft response to the Greek financial crisis – they said Germany would be better off with Athens out of the Eurozone.

As Europe’s strongest economy, Germany contributes the greatest amount to the Greek bailout package.

Merkel, too, has faced criticism within her own camp – chiefly, from Finance Minister Wolfgang Schaeuble who said that it would have been better had Greece exited the Eurozone for a five-year temporary period.

In the meantime, the European Commission has given Greece a “bridge” financing of $8 billion to allow it to meet its most immediate financial needs and pay back the European Central Bank a loan of $3.9 by July 20.

The BRICS Post with inputs from Agencies

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