In Athens, Deputy Finance Minister Dimitris Mardas said banks would reopen Monday after a three-week closure, though withdrawal restrictions would remain in place.
European Union finance ministers also approved 7 billion euros ($7.6 billion) in bridge loans to Greece, allowing it to make a bond payment to the ECB next Monday and clear its arrears with the global Monetary Fund. The ECB had capped its emergency loans for Greek lenders since June 28, a move that prompted Greece to close its banks for business and limit ATM withdrawals to stem the flow of deposits out of the country’s banks. “Governments fall when they lose the support of the people, he says”.
Markets now turn their attention to European Central Bank President Mario Draghi’s news conference later this afternoon. Only days ago, Greece was confronted with the threat of a euro-zone exit if it missed that crucial deadline.
Protesters threw dozens of petrol bombs and hurled stones at the police, who responded with clouds of tear gas.
Tsipras told lawmakers he had accepted a package he did not believe in and which would harm Greece, but the only alternative was a disorderly bankruptcy that would be more catastrophic. Greeks would still be limited to withdrawing 60 euros ($88) a day from their accounts but they would not need to line up at ATMs every day to do so.
ESM chief Klaus Regling told Germany’s ARD television Thursday that failure to reach a final agreement would mean the collapse of Greece’s banking system.
Though the broad outlines of the Greek bailout were agreed on Monday, specific terms will now be thrashed out between Greece and its European creditors.
Draghi said the European Central Bank would increase ELA funding by 900 million euros.
Greece awoke with a political hangover on Thursday after parliament approved a stringent bailout program, thanks to the votes of the pro-European opposition, amid the worst protest violence this year.
“What we’re witnessing is European solidarity in action”, said Mr Dombrovskis.
To prevent a catastrophic “Grexit”, parliament in Athens early Thursday adopted sweeping reforms on pensions, taxes and labour laws that were harsher than those Greeks had rejected in a July 5 referendum. “But this would perhaps be the better way for Greece”, he said.
Sharp-tongued parliament speaker Zoi Konstantopoulou accused creditors of “blackmailing” Greece.
Merkel and her hardline Finance Minister Wolfgang Schaeuble have been harshly criticised for forcing more austerity on Greece, using the threat of a five-year euro “time-out” that had been floated by Schaeuble.
Stubb said in a tweet that the so-called Grand Committee has given the government “a mandate for bridge financing and beginning of ESM-negotiations on Greece”.
As well as commenting on the broad economic situation, Draghi will likely be quizzed over when the ECB will increase emergency credit to Greek banks.
Greece’s creditors demanded the Greek vote before opening full bailout negotiations.