Since June 29 after the ECB freezed the flow of ELA funding amidst an impasse in negotiations for the debt deal, all bank branches in Greece have shut down.
However, faced with Grexit, or Greece’s exit from the Eurozone, Tsipras this week agreed to the reforms in return for the rescue.
Greece’s creditors estimate Athens needs 12 billion euros to get through mid-August – including 4.2 billion euros it must pay the ECB on Monday to keep its crippled banks alive – but some countries are resisting contributing to any bridge financing.
“Politicians across 27 countries have invested their own political capital to speed through national decisions to shoulder Greece at this hard time for the country”, he added.
It leaves Tsipras in a stronger position to deal with a left-wing revolt in Syriza led by the outspoken Speaker of Parliament, Zoe Konstantopoulou, who may well find herself out of a job by day’s end.
Chancellor Angela Merkel said: “The alternative to this agreement would not be a “time-out” from the euro… but rather predictable chaos”. One consolation: the Germans owe more.
But try telling that to the hawkish German Finance Minister Wolfgang Schaeuble, one of Greece’s sternest critics, who is still raising the prospect of Athens quitting the euro, at least temporarily.
In the test ballot, 48 lawmakers in the conservative bloc opposed talks on further Greek aid while three abstained, the sources said.
The 229-64 tally secured the majority needed for the austerity measures to be approved by the Greek Parliament, but threw up cracks in Tsipras’ ruling party, prompting speculation of an imminent cabinet reshuffle.
Tsipras’ radical left Syriza party was to hold a meeting of its lawmakers early Wednesday afternoon.
The legislation, which includes consumer tax increases and pension cuts, was demanded as a precondition to the launch of negotiations on a third bailout.
“It’s uncontroversial that debt relief is necessary and I think that nobody has ever disputed that”, Mr Draghi said.
Draghi also said that Greece – whose debts amount to 180 percent of economic output – would need some sort of debt relief.
The first visible sign of economic healing in Greece will emerge when the banks open their doors again.
The worldwide Monetary Fund has signaled it may not participate in the new, three-year bailout, warning, “The events of the past two weeks – the closure of banks and imposition of capital controls – are extracting a heavy toll on the banking system and the economy, leading to a further significant deterioration in debt sustainability relative to what was projected”.
After a stunning win in a referendum that rejected calls for more austerity, Tsipras remained in a bind this week as he reached a deal with creditors: Greece’s cash-starved banks would likely have collapsed, sending the country spiraling out of the euro, Europe’s joint currency. The official spoke on condition of anonymity because the discussions were not public.
With another austerity vote planned next week, Voutsis cautioned that the level of dissent shown Thursday had fallen just short of toppling Tsipras’ 6-month-old government, which was elected on a pledge to free Greece from debilitating austerity.