Greek bank closure cost economy 3 billion euros | News | DW | 18.07.2015
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Greek bank closure cost economy 3 billion euros

The Greek government has ordered banks to reopen on Monday under slightly changed capital control measures. Exports and the retail sector took a massive hit during Greece's three-week shutdown.

Greece's economy suffered a 3 billion euro ($3.2 billion) loss when the government shut down its banking sector on June 29.

On Saturday, the newspaper "Kathimerini" estimated the financial cost of the capital control measures, which led to millions of customers' checks and bills being left unpaid and ATM withdrawals limited to 60 euros per day.

No money to spend

The paper said the retail trade alone, which was in the middle of the peak summer season, suffered a 600 million euro loss, citing estimates from commercial professionals.

Consumers switched from apparel and electronics purchases to fuel and food, although the paper said both these categories also suffered losses.

Losses to Greek exports, which include refined petroleum, medicine and food, totaled 240 million euros, the paper reported, quoting data from the Panhellenic Exporters Association.

With the banking system frozen, many manufacturers struggled to ensure delivery of the raw materials that they need to operate. Around 4,500 containers are currently blocked at customs. The total cost of the bank shutdown to exporters has been calculated at 1.8 billion euros, according to an estimate by "Kathimerini."

The figures don't include the tourism sector, which is at the height of the summer season and saw a large number of cancellations from foreign visitors.

Although the bank restrictions didn't affect international bank card holders, many holidaymakers fretted over whether they would run out of cash on vacation.

Withdrawal limits relaxed

Within hours of the calculation being published, the government signed a decree ordering the banks to reopen on Monday. Officials said while many restrictions would remain in place, a new maximum weekly withdrawal limit of 420 euros would replace the daily 60 euro limit..

The backlog of missed payments will likely take several weeks to clear and restrictions on transfers abroad and other capital controls will remain in place.

The bank shutown led to Containers being stuck in Greek ports.

Losses to Greek exports, including refined petroleum, medicine and food, totaled 240 million euros

The European Union is due to release a 7.16 billion euro short-term cash loan to Athens on Monday.

Bailout derided

Leading German economists cautioned against approving a third Greek bailout, as Germany's Bundestag gave its backing for the start of talks for a new deal.

In an interview with the newspaper "Passauer Neue Presse" on Saturday, economist Hans-Werner Sinn warned that any new aid would be "totally worthless" and "would never come back."

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