Greek banks set to reopen

  • 20/07/2015
Greeks are now able to withdraw up to 420 euros at once per week (Reuters)
Greeks are now able to withdraw up to 420 euros at once per week (Reuters)

Greece is preparing to restart its struggling economy with a revamped government, a bank reboot and a new round of tax hikes agreed after months of fraught confrontation with its creditors.

Banks are set to reopen Monday (local time) after a three-week shutdown estimated to have cost the economy some 3.0 billion euros in market shortages and export disruption.

Crisis-hit Greeks will also have to endure widespread price hikes with a broad batch of goods and services - from sugar and cocoa to condoms, taxis and funerals - now taxed at 23 percent, up from 13 percent.

To sweeten the pill, the tax on medicines, books and newspapers falls from 6.5 percent to 6.0 percent.

With Greeks now able to withdraw up to 420 euros at once per week, people will be spared the ordeal of queuing daily at ATMs in the summer heat, which thousands did for three weeks for a mere allowance of 60 euros per day.

But capital controls remain largely in place, including a block on money transfers to foreign banks and a ban on the opening of new accounts.

Greece last week had to agree to a tough fiscal package to earn a three-year bailout from its international creditors and avoid crashing out of the eurozone.

For the first time in months, technical teams representing the creditors - the European Union, the European Central Bank and the International Monetary Fund - are expected in Athens next week to assess the state of the economy.

The austerity package caused a mutiny among lawmakers of the ruling radical Syriza party, forcing Prime Minister Alexis Tsipras to carry out a limited reshuffle on Friday.

Even so, most analysts and even government officials say early elections are now inevitable, and are likely to be held in September.

Tsipras - who barely has time to eat or sleep, according to his mother - faces a fresh challenge in parliament on Wednesday to approve a second wave of reforms tied to its economic rescue.