Promising Signs For Greece Economy: Banks Reopen

Over the past half decade, Greece has been in the midst of an economic crisis which had finally reached a boiling point over the past several months. Recent events, however, hope to put the country back on track as they look to recover from the debt crisis.

The Greek parliament approved a new bailout package last week which includes tax hikes, pension cuts, strict curbs on public spending, an overhaul of the bargaining rules and a transfer of 50 billion euros of state assets into a special privatization fund.

This past Monday, Greece reopened its banks and started the process of paying off billions of euros owed to international creditors. This is a promising sign as the country looks to return to normal after new bailout reforms were put in place.

Over the past several weeks, banks had remained closed to save the financial system from collapsing due to an influx of withdrawals which could have left Greece in an even riskier position. The bank branches have finally reopened and customers lined up to try and get cash in hand as many are still weary of what the economic future holds for Greece.

Limits on withdrawal amounts are in place, with a cap of 420 euros per week. In addition, payments and wire transfers abroad are still not allowed, which has angered many people abroad with financial ties to the country. So while it is clear that Greece is now moving in a positive direction, there is still a great deal of work to be done.

Almost two thirds of Greece’s debt, which has amassed to around 200 billion euros, is owed to the eurozone bailout fund or other eurozone countries. Although Greece will not have to make any payments on this enormous debt until 2023. While a longer timeframe has been proposed by the International Monetary Fund, the current schedule will hopefully give Greece enough time to make good on these payments.

The head of the Greek bank association, Louka Katseli, recently stated that “capital controls and restrictions on withdrawals will remain in place but we are entering a new stage which we all hope will be one of normality.”

You can learn more about the the plans for Greece moving forward here as well a detailed explanation of the Greece debt crisis in its entirety from The New York Times.