Greece closed its banks and imposed capital controls in a bid to avert a financial collapse.
Greek Prime Minister Alexis Tsipras called for calm as he announced plans Sunday to shut the country's banks and place restrictions on cash withdrawals. During a televised address to the Greek people Tspiras assured that citizens' savings, wages and pensions were "guaranteed."
The measures come after bailout talks between the leftwing government and international lenders broke down at the weekend.
Banks will stay closed all next week, the stock exchange shut on Monday and cash machine withdrawals were limited to €60. Greeks can continue to pay bills online, but they cannot move their money abroad; there will be no bank withdrawal limits on foreign cards. Capital controls are likely to last for many months at least.
After 5 months of arduous negotiations, Greece's European partners have put the blame for the crisis squarely on Tsipras' shoulders. The 40-year-old premier caught them by surprise in the early hours of Saturday by rejecting the demands of lenders and announcing his decision to hold a snap referendum on July 5 on the bailout terms put forward by the ECB, the IMF and the EU.
After announcing the referendum, Tsipras asked for an extension of Greece's existing bailout until after the July 5th vote. Euro zone officials refused, and in his televised address Tsipras bemoaned the refusal as an "unprecedented act".Even as Tsipras spoke, long lines formed at cash machines and gas stations around the country.
Despite the hardening of positions, there were signs that Greece’s creditors were leaving the door open to negotiations in a last attempt to salvage the situation. But it remained unclear ahead of Tuesday’s IMF repayment deadline how Greece would be able to satisfactorily arrange its finances.
During a frantic round of calls U.S. President Barack Obama called German Chancellor Angela Merkel, and senior U.S. officials urged Europe and the IMF to come up with a plan to hold the single currency together and keep Greece in the eurozone. The German and French governments announced emergency meetings.